Bottom line: A steady series of leaked photos of a smartphone co-produced by Google and Huawei is designed to give face to Beijing, and could pave the way for a China entry for Google’s Nexus phones and app store by year end.
China wins face in Google-Huawei tie-up
Barely a day has gone by recently without a leaked photo appearing on the Internet of a new smartphone being developed in a landmark tie-up between Chinese up-and-comer Huaweiand Google’s (Nasdaq: GOOG) Nexus brand. A cynic like me would speculate that the growing volume of noise looks rather deliberate, and that both sides are intentionally trying to drum up buzz for a new Nexus model that will become the brand’s first to be made by a Chinese manufacturer.
Huawei
Huawei’s motivations for leaking the information are obvious: this particular tie-up will bring it the validation it craves for its young smartphone business, giving its products the stamp of approval from one of the world’s leading technology names. But Google’s motivations are a bit more subtle. Certainly it’s natural to hype up this kind of new product before the launch. But in this case Google is almost certainly aware of the “face” that China will receive from such a move. That could help to soothe its tense relations with Beijing as it eyes a return to a market it can’t afford to ignore. Read Full Post…
Bottom line: Youku Tudou’s new name and campaign to create more exclusive content look like good strategic moves, but it really needs to sell itself to a larger benefactor to ensure its longer-term future.
Youku Tudou to change name, develop content ecosystem
Youku Tudou (NYSE: YOKU) was once China’s top online video site when it was formed 3 years ago through the merger of the country’s 2 leading players. But those glory days are firmly in the past now, as the company has been overtaken by more aggressive names like LeTV (Shenzhen: 300104) and iQiyi, the service backed by cash-rich online search giant Baidu (Nasdaq: BIDU).
Now media are reporting that Youku Tudou is rolling out a major overhaul that will include a new name for the company, as well as a massive spending campaign to build up an ecosystem for creating its own video content. The campaign certainly seems interesting and long overdue. But I’ve argued for a while now and still believe that what Youku Tudou really needs is to consider selling itself to a stronger Internet partner, rather than trying to continue as an independent company. Read Full Post…
Bottom line: Tencent’s new WeChat push into Europe looks like a better strategy than its previous failed US effort, though it should provide more support to its local partners if it wants to succeed.
WeChat signs on Italian partner
After a disastrous and costly foray into the US, leading Chinese mobile messaging app WeChat is gearing up for a new attempt at going global, this time setting its sights on Europe. This particular push has WeChat, a unit of Chinese Internet giant Tencent (HKEx: 700), forming small tie-ups with local European partners to promote the service. The latest of those has seen WeChat link with a small Italian start-up called ChatSim, which provides technology that lets users link up different mobile chatting apps.
Announcement of this particular tie-up is clearly the work of ChatSim, which has put out a slightly amateurish press release announcing the partnership. (company announcement) That said, I do think that more broadly speaking Europe looks like a better place for Tencent to try its luck at global expansion. That’s because the US is already quite hotly contested not only with WhatsApp but also rival instant messaging products from Internet giants like Google (Nasdaq: GOOG) and Facebook (Nasdaq: FB), which also owns WhatsApp. Read Full Post…
Bottom line: Qihoo’s new Dazen smartphones stand a low chance of success, even if they provide better quality to comparably priced rivals, due to their late entry to the overheated ultra low-end of China’s smartphone market.
Qihoo unveils Dazen smartphone
About a half year after announcing its intent to enter China’s crowded smartphone space, software security specialist Qihoo (NYSE: QIHU) has unveiled its new product under a brand name that sounds clever and catchy but is decidedly downscale. Qihoo has just announced that its new smartphones will carry the brand name of Dazen, and will sell for a bargain basement price of 899 yuan, or about $150.
The move appears to be an extension of Qihoo’s longtime strategy of selling products cheaply or even giving them away for free, and then using those products as a marketing tool for its other paid products and services. But in this case the strategy of going after the ultra low end looks a bit questionable, since that part of the market is already quite crowded and many brands are believed to be losing money. Read Full Post…
Bottom line: US national security regulators are likely to approve the potential purchase of Micron by China’s Tsinghua Unigroup, to demonstrate their commitment to fair trade and avoid politicizing cross-border high-tech M&A.
Micron sale likely to get US approval
In the days after reports emerged that China’s Tsinghua Unigroup was planning a bid for US memory chip giant Micron (NYSE: MU), media have been buzzing with speculation over whether Washington might veto a deal on national security grounds. I can understand the logic from both views, and some say recent US allegations of frequent hacking attacks from China could add to arguments for a veto of the deal.
But as a longtime watcher of this kind of transaction, I expect that Washington will ultimately approve the purchase to demonstrate its commitment to fair trade. Such a move would also send a strong signal to Beijing, which is showing growing signs of limiting sales by foreign technology companies in China with its recent introduction of a sweeping new national security law. Read Full Post…
Bottom line: Tsinghua Unigroup could end up scrapping its plans to bid for Micron due to fears of political resistance, while a new mobile OS that it’s backing is probably getting support from Beijing but is likely to fail.
China bid for Micron meets with early resistance
The recently acquisitive Tsinghua Unigroup is in a couple of headlines today, as the politically-connected company chases its dream of becoming China’s first IT products and services giant. The first headline has the company investing $100 million in a company developing a mobile operating system (OS) that could someday rival Google’s (Nasdaq: GOOG) Android and Apple’s (Nasdaq: AAPL) iOS. The second hints at the political resistance that Unigroup could meet as it reportedly gets set to make a $23 billion bid for leading US memory chip maker Micron (Nasdaq: MU), with reports that a powerful senator has concerns about the deal. Read Full Post…
Bottom line: The iPhone’s appearance at the top of a Chinese investigative list of “data hogs” reflects the company’s obsession with control, but is unlikely to have a long-term negative effect on its local image.
iPhones gobble up data
Chinese media are once again feasting on leading smartphone maker Apple (Nasdaq: AAPL), which has has come out squarely on top of a “list of shame” that details how some of the best selling brands quietly steal data minutes from their unaware users. I’m not an iPhone user so I can’t attest to how the iPhones steal their data and how easy it is for users to stop the process. But my Google (Nasdaq: GOOG) Nexus phone is guilty of similar data hogging, and I had to pay a couple of large phone bills after I first bought it before I finally learned how to stop such automatic data consumption. Read Full Post…
Bottom line: Google is likely to soon announce that Huawei will make its next generation of Nexus smartphones, in an alliance that looks savvy for both companies for political and practical reasons.
Google, Huawei preparing Nexus partnership?
Global search giant Google (Nasdaq: GOOG) is continuing its low-key drive back to China, with word the next model from its Nexus line of smartphones will be produced by fast-rising domestic brand Huawei. The move is unconfirmed and sourcing in the reports comes from an unnamed Huawei employee.
But such a move would certainly be consistent with Google’s other recent actions, which have seen it moving quietly behind the scenes for a more active role in China’s smartphone market, the world’s largest. Despite its lack of formal presence, Google already enjoys a huge passive role in the market due to the huge popularity of its Android operating system, which is used by nearly all of China’s homegrown smartphone makers. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 19. To view a full article or story, click on the link next to the headline.
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Alibaba’s (NYSE: BABA) Ant Financial Valued at $45 Bln After New Funding: Source (English article)
Huawei to Make Nexus Smartphones for Google (Nasdaq: GOOG) – Employee (Chinese article)
Bottom line: Google could open a Chinese version of its app store by the end of this year and spend aggressively to quickly gain market share, but would face negative backlash from western critics for its U-turn back into the sensitive market.
Google lobbies China smartphone makers to include Play Store
Global Internet giant Google (Nasdaq: GOOG) is reportedly eying a return to China, with plans to launch a Chinese version of its flagship Google Play app store. The move, if true, would mark a major flip-flop for Google, which withdrew its core search engine from China in 2010 after a high-profile spat over Beijing’s strict censorship policies. But as many similarly principled companies quickly discover, China is a market that is simply too big to ignore.
That quandary led top business networking site LinkedIn (NYSE: LNKD) to enter China last year, despite expressing its own reservations about censorship, and top social networking (SNS) site Facebook (Nasdaq: FB) is also lobbying strongly for such a move. Google’s latest campaign comes in a the slightly less sensitive area of app store operation, though even that business would involve some self-censorship to eliminate apps that Beijing might consider sensitive for political or other reasons. Read Full Post…
Bottom line: Uber should consider forming closer alliances with local city governments to boost its chances of survival in China.
By Jeffrey Towson
Uber struggles in China
Hired car services giant Uber is now in the situation you never want to be in in China: a foreign company on the wrong side of both the government and powerful local competitors. Ask Google (Nasdaq: GOOG) and Yahoo (Nasdaq: YHOO) how that worked out. However, Uber can still win in China. They have one last move that could reverse the situation. They can do what homegrown rivals Kuaidi and Didi won’t. They can ignore the advice of Alibaba (NYSE: BABA) Chairman Jack Ma and marry the government.
Ma has famously said “Never, ever do business with government. Love them. Don’t marry them. So, we never do projects for government.” Compare this to statements by Kuaidi’s CEO Joe Lee, who said “One thing we learned is if we want to grow fast, we need to make sure the government supports us. Because in China, they can stop you in one day — they shut down your server and you’re out.” Read Full Post…
