A couple of items from the consumer electronics space are worth looking at today, including one that shows Huawei’s consumer unit forecasting surprisingly slow growth while electronics giant Hisense (Shanghai: 600060) is cementing an interesting TV tie-up with Google (Nasdaq: GOOG). Both of these news bits highlight China’s growing prowess as a consumer electronics maker, as the country rapidly rises to challenge traditional powerhouses like Japan, South Korea and Taiwan with products that can compete globally not only in price but also in quality.
Tag Archives: Google
ZTE on Long Smartphone March 中兴走上智能手机“长征”路
Telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) is hoping to avoid the fate of faded cellphone giants Nokia (Helsinki: NOK1V) and Motorola by focusing on smartphones as it hones an expansion strategy that it hopes will revive its stagnating fortunes. That seems to be the latest message from the embattled company, whose profits have plunged in recent quarters as its core telecoms equipment business weakens and it pumps major new investment its cellphone unit. Personally speaking, I do think the emphasis on smartphones is a smart one as these computer-like phones are clearly the wave of the future and will probably outsell older phones within the next 5 or 6 years.
Alibaba-Google: China’s Android Addiciton 阿里巴巴—谷歌：中国的“安卓瘾”
Despite its high profile exit from the mainland search market in 2010, Google (Nasdaq: GOOG) has quietly regained its position as a powerful force in China these last two years through the rapid rise of its Android mobile operating system (OS) that powers many of the nation’s smartphones. Its new rise was on display last week, as the US Internet giant threw a major wrench into the smartphone plans of Alibaba, China’s leading e-commerce company. With most Asian cellphone makers increasingly dependent on Android, Chinese firms that will depend on the mobile Internet for future growth need to think about creating their own new mobile platforms to rival Android. Otherwise they will risk becoming hostage to the world’s biggest Internet company, which could use its clout to ensure its own products always take precedence over its Chinese rivals’.
Lee Kai-Fu, Huawei Turn Up the Offense 李开复“军团”和华为开始反击
I lauded a group of Chinese Internet leaders earlier this week for finally taking a more offense-oriented approach to a prolonged series of short seller attacks against them, saying Chinese firms needed to be more aggressive when they found themselves being bullied by foreigners on the global stage. Now it seems that same group is turning up its attack a notch by demanding an apology from the short sellers; and in a similarly aggressive and offense-oriented move, telecoms equipment maker Huawei is indirectly expressing outrage and frustration at a steady stream of US allegations that its equipment contains deliberate security lapses designed for to enable spying by Beijing.
China Start-Up Patron Attacks Short Sellers 李开复炮轰做空机构Citron
An entertaining war of words has broken out this week between one of the most outspoken short sellers of US-listed Chinese stocks over the last year and an China-based Internet veteran whose company is helping to fund many similar companies to the ones under attack. Followers of China’s Internet will know that the short seller I’m referring to is a California-based company called Citron, whose most recent attacks have targeted Internet security software maker Qihoo 360 (NYSE: QIHU) by questioning the company’s user data. The Internet veteran, meantime, is Lee Kai-Fu, a former top executive at Microsoft (Nasdaq: MSFT) and Google (Nasdaq: GOOG) who left Google in 2009 to start his own company called Innovation Works to fund Chinese high-tech start-ups. (English article; Chinese article)
Qihoo Takes on Baidu in Search 奇虎360搜索低调上线 或挑战百度龙头地位
I’ve been watching with interest these last couple of weeks as Internet software security specialist Qihoo 360 (NYSE: QIHU) takes an uncharacteristically low-profile approach to its new online search service, in a clear and interesting challenge to industry titan Baidu (Nasdaq: BIDU). Qihoo’s controversial founder Zhou Hongwei has been mostly quiet since the service’s recent debut, even as media reported the company quietly severed its long-standing relationship with Google (Nasdaq: GOOG) in launching its own technology. Now it seems that Zhou, who seems to thrive on controversy, is challenging Baidu itself, though not in the way that most people might think.
Google’s Latest China Headache: Motorola 谷歌在华又遇头疼问题：摩托罗拉
The colorful love-hate relationship between Beijing and Google (Nasdaq: GOOG) never seems to stop evolving, flaring up this time with extensive coverage in state-run media over big China layoffs at Google’s recently acquired Motorola cellphone unit. In all fairness, Motorola’s decision to lay off 1,400 China employees is certainly big news by itself, with the China reductions accounting for more than a third of a recently announced round of 4,000 global job cuts by Motorola. But that said, I have little doubt that domestic media are being quietly encouraged to report extensively on the cuts by Beijing leaders who still feel stung by Google’s 2010 high-profile decision to withdraw from the China online search market.
Tudou, Youku Merger Moves Ahead as Growth Slows 随着增长放缓，优酷、土豆合并有进展
Baidu, Sina in Smart Cellphone Tie-Ups 百度、新浪在智能手机领域的合作
After witnessing a steady stream of puzzling moves into the smartphone space by Internet companies in recent months, I’m happy to say I’m finally seeing 2 new moves that I like by sector leaders Baidu (Nasdaq: BIDU) and Sina (Nasdaq: SINA). The rush into smartphones has seen many major Internet firms launch their own new products in the last 12 months, from Internet giant Tencent (HKEx: 700) to e-commerce giant Alibaba, security software specialist Qihoo 360 (NYSE: QIHU) and game operator Shanda. Clearly these companies are trying to grab a share of the fast-growing mobile Internet market, which could easily overtake traditional desktop web surfing in just a few years with the explosion of 3G services and smartphones. But rather than partner with strong players using existing mobile platforms, many of these new initiatives are pairing with less experienced cellphone makers like home electronics giants Haier and Changhong, meaning their chances of success are very limited. That’s why I like these 2 new deals with Baidu and Sina, which will see each company partner with a strong smartphone player in a very targeted way rather than trying to develop completely new models. In Baidu’s case, China’s leading search engine is reportedly close to a deal that will see its mobile search engines pre-installed on Apple’s (Nasdaq: AAPL) wildly popular iPhones sold in China. (English article) Meantime, Sina has signed a deal that will see its popular Weibo microblogging service featured prominently on the home screen of a second-generation smartphone model developed for China by Taiwan’s HTC (Taipei: 2498), another strong handset maker. (Chinese article) Let’s look quickly at the Apple-Baidu deal first, as that’s the bigger of the 2 and looks like a smart move for both companies. Apple’s iPhones are quite popular in China, but their high price tag means the models now command a much smaller portion of the market than cheaper smartphones using Google’s (Nasdaq: GOOG) free Android operating system. So this move should help Apple to gain some share by providing easier access to China’s most popular search engine. From Baidu’s perspective, inclusion of its search engine on iPhones should help it gain more dominance in the mobile Internet, an area it doesn’t dominate nearly as much as it does for traditional desktop web searching. The Sina-HTC tie-up should also benefit both of its partners, giving Sina greater exposure for Weibo as it tries to monetize the popular microblogging service in the run-up to an eventual IPO. The tie-up could also provide a sales lift for HTC, whose fortunes have sputtered recently, as Weibo enthusiasts might be more likely to buy this new smartphone model. I hope we see more tie-ups like this in the months ahead, as they look like smart ways to gain share in the emerging mobile Internet. In the meantime, look for these other initiatives involving self-developed smartphones from Alibaba, Shanda and others to be quietly retired in the months ahead after they find few or no buyers after their roll-outs.
Bottom line: New tie-ups by Sina and Baidu look like good highly focused moves to gain share in the crowded mobile Internet market by pairing with established smartphone makers.
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News Digest: June 2-4, 2012 报摘： 2012年6月2-4日
The following press releases and media reports about Chinese companies were carried on June 2-4. To view a full article or story, click on the link next to the headline.
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◙ MIIT Official: China’s 3G User Base Just 80 Mln (English article)
◙ China Lodging Group (Nasdaq: HTHT) Announces Investment in Starway Hotels (PRNewswire)
◙ Renren (NYSE: RENN) Considers Spin-Off, Listing for Game Unit – Source (Chinese article)
◙ Google (Nasdaq: GOOG) Warns China Users on Searches That May Break Connection (English article)
◙ Tencent (HKEx: 700) Soso, Microsoft (Nasdaq: MSFT) Bing to Tie Up on Search Ads – Source (Chinese article)
Microsoft E-Commerce: Late to the Game Again 微软进军中国电商市场最终或以失败收场
I suppose I should congratulate Microsoft (Nasdaq: MSFT) for finally realizing the huge potential of e-commerce in China, even though it’s quite late coming to this incredibly competitive space. Then again, no one will ever accuse Microsoft of being a leader in anything these days, as this company is clearly a follower that takes advantage of its dominant PC presence with Windows to force its way into other product and service areas developed by nimbler, more innovative companies. Chinese media are reporting that Microsoft, through its MSN platform, is planning to enter the crowded e-commerce space in China following the recent end of beta testing for its Chinese-language Bing search engine. (English article) The company didn’t provide any details, but it sounds like the new e-commerce platform will be somehow integrated with Bing, as well as Microsoft’s Windows platform that is also the dominant PC operating system in China, similar to the rest of the world. First off, I have to say that I’m amazed that Bing in China is just finishing up its beta testing, as Microsoft launched the site 3 years ago. Clearly it wasn’t fast-tracking Bing in China, which is obvious from the fact that the search engine is still a non-player in the market, similar to its status in the rest of the world despite Microsoft’s putting large resources into this key Internet area dominated by Google (Nasdaq: GOOG) globally and local search leader Baidu (Nasdaq: BIDU) in China. But let’s take a rest from my sarcasm about Bing, and turn my attention instead to this ludicrous new e-commerce initiative. I use the word “ludicrous” not because e-commerce isn’t an area filled with huge potential, but rather because Microsoft will stand little or no chance of success because the space is already so crowded with other much bigger names with far longer histories in the area. In terms of actual numbers, China’s e-commerce market was worth 500 billion yuan in sales in 2010, or nearly $100 billion, and is likely to hit the 1 trillion yuan mark by 2015 if current growth trends continue. But much of that growth has been fueled by a crowded field of both home-grown and international players who will be formidable rivals even for Microsoft. Just to name a few, the former category includes industry leader Alibaba, along with challengers Jingdong Mall, Suning and Dangdang (NYSE: DANG). In the latter category, retail giants Amazon (Nasdaq: AMZN) and Wal-Mart (NYSE: WMT) are both making aggressive pushes in the space, the former with a major expansion of its China website and the latter through its investment in another domestic player called Yihaodian. I’m not saying that entry at this late stage is impossible, as Microsoft does have some advantages that its rivals don’t have. But the lateness of this arrival, combined with the presence of so many well-funded, highly experienced rivals, make me fairly confident in saying that this new e-commerce initiative will ultimately end up a failure.
Bottom line: Microsoft’s new China e-commerce initiative is likely to fail due to its late arrival to the sector where it will face stiff competition from well-funded domestic and international rivals.
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