Bottom line: Larry Page’s latest remarks are the newest signal that Google is working to return to China with a local version of its Play store and Nexus phones, as it tries to open a new chapter in its tense relationship with Beijing.
Larry Page hands off Google China strategy to new CEO
Observers are putting the latest China comments from one of Google’s(Nasdaq: GOOG) co-founders under the microscope, trying to figure out the company’s intentions towards a market that it both loves and hates. The bottom line seems to be that Larry Page wants to personally distance himself from China, following his company’s high profile spat with Beijing over censorship that saw Google withdraw from the Chinese search market in 2010.
But at the same time, Page wants to let others take Google back into China, in a nod to the importance of a market that has become the world’s largest for both smartphones and Internet use. That’s probably quite a prudent approach in face-conscious China, where personal relationships are a key element to doing business. That same principle also means that meetings between people with strained relationships should also be avoided, which is what Page appears to be doing by personally distancing himself from Google’s future operations in China. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 4. To view a full article or story, click on the link next to the headline.
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JD.com (Nasdaq: JD) Says Alibaba Pressuring Merchants Before Singles’ Day (English article)
Over 40 Pct of China’s Online Sales Counterfeit, Shoddy: Xinhua (English article)
Bottom line: Tim Cook’s latest trip to China and Google’s new investment in a Chinese voice recognition technology firm reflect efforts by both to build up app-making infrastructure to thrive in the increasingly important market.
Google invests in voice technology firm
Leading high-tech giants Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) are both in the China headlines today, led by the third visit this year to the country by Apple CEO Tim Cook to promote app development for his company’s iPhones. Meantime, Google is in the headlines for its new investment in a fast-growing maker of an app that uses voice recognition technology, which many companies believe will be central to mobile devices of the future.
Neither of these stories is huge and instead both are mostly incremental, underscoring the growing importance that China is playing in the global market for high-tech gadgets. In recognition of that fact, Apple realizes it needs to build a robust field of locally-based app developers to make sure its iPhones can maintain their place in the world’s largest smartphone market. Read Full Post…
Bottom line: Google’s establishment of China-based servers and registration of Chinese domain names associated with its app store show it could enter the local smartphone market by Lunar New Year and quickly become a significant player.
Google sets up China servers
New information on a low-profile but authoritative techie website is hinting that Google (Nasdaq: GOOG) is inching towards a return to China, but this time in the less controversial hardware and apps areas where rival Apple (Nasdaq: AAPL) has built a lucrative business. The somewhat geeky posting says Google has quietly set up several servers in China, and has registered China-related Internet domain names associated with Google Play, its main app store that is now blocked in the country.
If and when it does announce its return, which could happen before the Lunar New Year, Google is almost certain to draw criticism from some western observers. Many of those previously lauded the company for the decision to shutter its China search engine in 2010, following a high-profile dispute over censorship. Those same people could accuse Google of hypocrisy with its decision to return to China, even though other major global names like Apple and Samsung (Seoul: 005930) already operate thriving businesses in the Chinese smartphone and app markets. Read Full Post…
Bottom line: Apple’s new drive to sell legal music, books and video in China stands a reasonably good chance of success, banking on consumers’ growing willingness to pay for such products if they are convenient and affordably priced.
iTunes comes to China
Following the record-breaking debut for its iPhone 6s models, tech giant Apple (Nasdaq: AAPL) is taking a big new risk by attempting something no one has done yet successfully: making profits from selling legal music and movies in China. The move was part of a newly announced major expansion of Apple’s online store in its second largest global market. But while Chinese consumers have shown a big willingness to pay huge premiums for iPhones, it’s far from clear they’ll do the same for movies and music that they can usually download for free.
Apple sold a record 13 million iPhone 6s models worldwide in their first weekend on sale, easily beating the previous record of 10 million for the iPhone 6 models. China was an important factor in achieving the new record, since the iPhone 6 wasn’t available here during the first weekend of its global launch due to technical reasons. Apple hasn’t given any individual country figures yet, but it’s probably safe to assume it sold at least 3 million of the new iPhones in China during their opening weekend. Read Full Post…
Bottom line: Microsoft’s new tie-up with Baidu could presage a major scale-back for its China-based Bing search engine, paving the way for Baidu technology to power the struggling service.
Microsoft, Baidu in new China search tie-up
An interesting new dance is taking shape between global software titan Microsoft (Nasdaq: MSFT) and leading Chinese search engine Baidu (Nasdaq: BIDU), paving the way for a potential exit of Microsoft’s Bing search engine from China after years of disappointing results. After announcing a new tie-up that will see Baidu promote Microsoft’s upcoming Windows 10 operating system in China, the pair are saying said that Baidu will now become the default search engine on the web browser associated with the newest Windows.
Microsoft will clearly benefit from the first move, which should help it to sell more legal copies of its core Windows OS in China. Baidu is the clear beneficiary from the second move, making this look somewhat like an even trade-off. But while the first move is relatively neutral to Baidu, the second will see Microsoft effectively sacrifice Bing in China. That’s because very few people use the search engine, and now that number will drop even more if Bing loses its default status on the new Windows browser. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 30. To view a full article or story, click on the link next to the headline.
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Facebook’s (Nasdaq: FB) Sandberg: China Business ‘Thriving’ Amid Ban (English article)
Shoemaker Skechers (NYSE: SKX) Plans 4,000 China Stores in Next 3 Years (Chinese article)
Microsoft To Replace Bing With Baidu (Nasdaq: BIDU) on Windows 10 in China (English article)
3 Telcos to Launch New Policy Allowing Data Carry-Over on Oct 1 (Chinese article)
Google (Nasdaq: GOOG) Unveils Nexus Phones by Huawei, LG to Battle IPhone (English article)
Bottom line: Huawei’s new Nexus tie-up with Google could help Huawei make significant inroads to the US, and could see Google enter the crowded Chinese smartphone market by year-end.
Huawei, Google link up through Nexus
Just days after the launch of the newest iPhone, fast-rising Chinese smartphone maker Huawei will make its own renewed push into Apple’s (Nasdaq: AAPL) home turf through a highly-anticipated tie-up with Internet titan Google (Nasdaq: GOOG). This particular tie-up will see Huawei make one of the newest phones in Google’s Nexus line, in a tie-up that has been written about quite a bit already but is set for a formal announcement later on Tuesday.
That announcement would come just days after the launch of the newest iPhone 6s models, which broke records by selling 13 million units over their first weekend. Apple was able to break that record in no small part due to contributions from China, the world’s biggest smartphone market, which was absent in the last iPhone global launch due to delays for technical reasons. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 29. To view a full article or story, click on the link next to the headline.
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Walmart’s (NYSE: WMT) Yihaodian Overhaul Sparks Mass Resignations (Chinese article)
Google (Nasdaq: GOOG) Leads Huawei into US Smartphone Market (Chinese article)
Didi Kuaidi Invests in Indian Car Hire App Ola (English article)
Beijing Commerce Department Opens Inquiry into Xiaomi False Claims (Chinese article)
Yahoo (Nasdaq: YHOO) Says on Track to Spin Off Alibaba (NYSE: BABA) Stake This Year (English article)
Bottom line: Lenovo’s plan to reorganize its mobile division around its struggling Motorola operations looks misguided, and doesn’t address why the company’s smartphones have become such industry laggards.
Lenovo reorganizes mobile unit around Motorola
Just a week after I called on PC giant Lenovo (HKEx: 992) to write off Motorola, the company is doing just the opposite and betting bit on the sinking US smartphone brand. That’s the latest word coming from reports that Lenovo is preparing a major overhaul for its struggling mobile operations, which are being reorganized with Lenovo’s recently acquired Motorola operations as the centerpiece.
All of this comes as Lenovo is rapidly emerging as the first major loser in the ongoing war for market share among China’s big smartphone makers. Lenovo reported dismal quarterly results a couple of weeks ago, including a miserable performance for smartphone operations that it hopes will someday replace fading PCs as its core business. Leading the poor results were a 31 percent drop in sales for its Motorola phone division, which Lenovo purchased last year from Google (Nasdaq: GOOG) for $2.9 billion. (previous post) Read Full Post…
Bottom line: Strong sales growth for Huawei’s Honor brand in the first half of the year reflects the company’s broader accelerating momentum, and could pose a growing challenge for domestic rival Xiaomi.
Huawei’s Honor brand grows in India, eyes US
More new data is showing the growing momentum for smartphone aspirant Huawei, with word that the company’s Honor brand surpassed its sales target in the first half of the year as it prepares to enter the US. The latest numbers continue to portray a surging Huawei, and show how the company is using its traditional strengths in product development and a newer expertise in consumer marketing to overtake big domestic rivals like Xiaomi and Lenovo (HKEx: 992) and also a host of smaller ones like Meizu and Coolpad (HKEx: 2369).
These latest numbers don’t look extremely impressive at first glance, as they show that Honor just slightly surpassed its sales target for the first half of the year. But in the current climate where many companies are missing their targets due to intense competition in China, the ability to not only meet but even slightly exceed a sales target does seem like a noteworthy accomplishment. Read Full Post…
