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: Huawei’s ongoing surge should help to consolidate its position as China’s leading domestic smartphone brand, while a newly formed cell tower operator will relieve China’s 3 telcos of the burden of owning and operating such assets.
New cell tower operator takes shape
The telecoms space is buzzing on both the operator and consumer products sides, with surging smartphone maker Huawei and a new cell tower operator called China Tower both rising in the latest headlines. The higher profile of these 2 telecoms headlines has Huawei continuing its rise to become the world’s third largest smartphone brand, stealing the title from the fading Xiaomi. Meantime, all 3 of China’s big state-run telcos have come out with one of their simultaneous announcements saying they have formally transferred their cell tower assets to China Tower.
This pair of stories is quite different, but the bigger picture is one of trying to improve by becoming more efficient and diverse. In the case of Huawei the company is trying to leverage its long experience in making telecoms equipment to diversify into the consumer-oriented smartphone space. In the second case, China’s telecoms regulator is trying to improve efficiency among the nation’s 3 stodgy telcos by doing something that carriers in the west did on their own long ago. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 15. To view a full article or story, click on the link next to the headline.
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Huawei Biggest China Smartphone Brand in Q3, Xiaomi Finishes Second (Chinese article)
3 China Telcos Complete Sale of Towers to China Tower (HKEx announcement)
Online Loan Search Platform Rong360 Lands 1 Bln Yuan Series D Funding (English article)
LeTV (Shenzhen: 300104) in Product Delivery Scandal After Sept 19 Promotion (Chinese article)
Geely (HKEx: 175) Said to Plan Research Center for London Black Cabs in UK (English article)
Bottom line: The bankruptcy of a major component supplier to ZTE and Huawei is the latest sign of stress in the overheated smartphone sector, and at least 1-2 small to mid-sized brands are likely to leave the market by mid-2016.
Smartphone price wars undermine parts maker Fosunny
Fresh new cracks are appearing in China’s smartphone making machinery, with reports that a major component supplier to Huawei and ZTE (HKEx: 763; Shenzhen: 000063) has gone bankrupt. At the same time, another report is citing bad weather for a supplier’s delivery delays that are causing Alibaba-backed (NYSE: BABA) smartphone maker Meizu to postpone the launch of a new high-end model.
The most worrisome of these 2 stories is the bankruptcy of Fosunny, a maker of metal casings used for smartphones. The company lists US wireless carrier AT&T (NYSE: T) and Europe’s Vodafone (London: VOD) among its customers on its website, but I suspect that both of those relationships come via third-parties like Huawei and ZTE that supply smartphones to those telcos. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 10-12. To view a full article or story, click on the link next to the headline.
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China Resources Unit to Sell Wal-Mart (NYSE: WMT) China Store Stakes for $525 Mln (English article)
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)
The following press releases and media reports about Chinese companies were carried on September 26-28. To view a full article or story, click on the link next to the headline.
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iPhone 6s China Launch Pits Apple (Nasdaq: AAPL) vs. Analysts (English article)
Online Medical Platform Guahao Raises $394 Mln in New Funding (English article)
Postal Savings Bank to Sell 15 Pct, Possible Buyers Include Ant Financial, Tencent (Chinese article)
Everbright Bank (HKEx: 6818) to Raise $2.5 Bln Selling Shares to Parent (English article)
Huawei Reportedly Set to Cut 20,000 Jobs, Company Cites Internal “Adjustment” (Chinese article)
Bottom line: Huawei’s new push into IT services could do well due to the company’s strong background in telecoms products, and could see it form a major partnership in the area with a big global player.
IT services tie-up ahead for Huawei?
Networking equipment giant Huawei is continuing its diversification, with word that it’s planning a major push into the market for information technology (IT) services that could put it into direct competition with such giants as IBM (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ). But perhaps more intriguing is the possibility that Huawei could form a major partnership with one of the big foreign names, amid a rise in such pairings due to restrictions on foreign firms under China’s new national security law.
Huawei began its life as a maker of networking equipment for big telecoms carriers, but more recently has tried to diversify as the global market for those products slows. It has pushed into networking equipment for enterprises, and more recently has found growing success with smartphones. But IT services has remained a relatively small portion of the business, expected to reach $2 billion in sales this year. That would be just a tiny portion of the 288 billion yuan, or about $45 billion, that Huawei posted in revenue last year. Read Full Post…
