Bottom line: Alibaba’s new hiring of a Washington insider to head its international government affairs reflects its attempts to look more global, and also an intense lobbying campaign to ensure its name stays off an annual US piracy list.
Alibaba bulks up in Washington
E-commerce giant Alibaba (NYSE: BABA) has just made a major new addition to its Washington lobbying team, as it gears up for what’s likely to become one of its biggest battles yet on Capitol Hill. That battle will see the company try to convince the Obama administration that it’s a strong partner in the battle against piracy, as it tries to stay off an annual list published by Washington that singles out major internet sites that don’t do enough to stamp out counterfeiting.
Alibaba’s new hire of former GE Capital executive Eric Pelletier to head its international government affairs is also part of its attempts to look more global by adding big-powered non-Chinese to its top management ranks. The move parallels similar hires by equally globally-minded companies including networking equipment giant Huawei and leading PC maker Lenovo (HKEx: 992), which are also trying to convince the world that they’re truly global players and not just Chinese companies. Read Full Post…
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: Huawei’s big deal with JD.com reflects growing momentum that will see it overtake Xiaomi in China’s smartphone market by year end, while Qihoo’s boosting of its stake in its Coolpad joint venture could be a prelude to an eventual buyout.
Huawei’s Honor scores big smartphone win
Two big smartphone stories are in the headlines today, led by a massive new order for Huawei that could help it move up the charts to unseat the stumbling Xiaomi as China’s second largest manufacturer. Another struggling player is in the second headline, with software security specialist Qihoo (NYSE: QIHU) announcing it will boost its stake in its joint venture with Coolpad (HKEx: 2369), another former superstar that is fast fading out of the China smartphone race.
After a period of brief quiet at the start of this year, these latest developments reflect some major shuffling happening in China’s smartphone market, which is at once the world’s largest but also extremely competitive. The latest trends show that global giant Apple (Nasdaq: AAPL) has begun to resurge in the market, and that the stodgier Huawei is also rapidly moving up the food chain. Meantime, former high-flyers like Xiaomi and Coolpad seem to be moving in the other direction. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 27. To view a full article or story, click on the link next to the headline.
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LeTV (Shenzhen: 300104) to Raise 7.5 Bln Yuan Through Private Placement (English article)
Bottom line: Apple’s retention of China’s smartphone crown for a second consecutive quarter is partly due to timing, but also owes to CEO Tim Cook’s new PR campaign that will help to win favor from Beijing and the broader Chinese public.
Apple’s Cook opens Weibo account
Media are fixated today on a new report showing China’s smartphone sales fell for the first time in this year’s first quarter, in a development that shouldn’t surprise anyone due to the market’s supersaturation. But equally impressive in the report is the ongoing surge of Apple (Nasdaq: AAPL), which managed to hold onto its title as the nation’s leading smartphone brand for a second quarter after stealing the crown from the high-flying Xiaomi.
Some may say Apple’s surge is due to timing, since it released its latest iPhones in October, fueling a fourth-quarter sales boom that lingered into the first quarter. That may be partly true, though I personally have to applaud CEO Tim Cook for mounting a very focused campaign to woo both Beijing and average Chinese consumers. In the latest move of that campaign, Cook has just opened his official account on Sina Weibo (Nasdaq: WB), China’s equivalent of Twitter (NYSE: TWTR), as he moves to communicate more directly with customers in one of his most important markets. Read Full Post…
Bottom line: Baidu’s crackdown on internal corruption and big jump in a ranking of global media firms are both good publicity, but won’t change the fact that it’s facing sharply slowing growth over the next year.
Baidu probes 3 directors for corruption
Following a bruising battle with some of its leading advertisers in March, leading search engine Baidu (Nasdaq: BIDU) is in the headlines this week on a more positive note with a report it is cracking down on internal corruption. At the same time Baidu is in a separate similarly positive headline that shows it is quickly climbing the ladder on a list of global media companies, surpassing much older rivals like Yahoo (Nasdaq: YHOO) and Microsoft (Nasdaq: MSFT).
The first of these headlines casts a spotlight on the many corrupt practices that frequently occur in China’s young business culture, such as preferential treatment for customers who pay “special” fees and bribe individual employees. Such practices were almost certainly a factor behind the high-profile spat that saw one of China’s largest associations of hospital owners boycott Baidu’s advertising services in March, dealing a significant blow to Baidu. (previous post) Read Full Post…
Bottom line: Tsinghua Unigroup is likely to win the bidding for a controlling stake in HP’s China-based networking equipment unit, and could help HP consolidate its place as one of China’s leading IT service providers.
Bidding war breaks out for HP asset sale
Hewlett-Packard (NYSE: HPQ) is finding itself in a rare position of power in China, with word that an unusual bidding war has broken out as it looks for a partner to buy a controlling stake in its locally-based networking equipment unit. The development could bring not only a windfall in terms of money HP will get for its H3C Technologies unit, but will also allow it to choose between 2 potent partners to help consolidate its place as one of China’s leading IT services providers.
HP is in the process of splitting itself into 2 as part of a broader restructuring announced last fall. In this case the China-based H3C networking equipment venture would almost certainly go into its new HP Enterprise unit, focused on products and services for corporate customers. The other main unit under the break-up will include HP’s older PC and printer businesses, which will go by the name HP Inc. Read Full Post…
Bottom line: Sina stands a 50-50 chance of getting a takeover bid within the next year, as suitors eye it for its low valuation, well-respected name and controlling stake of Weibo.
Sina anticipating suitor?
Leading web portal Sina (Nasdaq: SINA) has become one of China’s perennial Internet underperformers, leading to occasional talk that it might become a takeover target for a larger, better-run peer. Now Sina has just announced its renewal of a “poison pill” plan designed to prevent such a hostile takeover. This particular move looks like a formality rather than indicator of a looming takeover bid, since Sina launched the original plan 10 years ago and perhaps it is now is now set to expire. But the fact that Sina is not only renewing the plan, but doing so in a very public way, indicates it may feel it could become a takeover target in the current hot climate for Chinese Internet M&A. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 29. To view a full article or story, click on the link next to the headline.
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At $5 Bln Valuation, Alipay To Buy 25 Pct Stake In Micromax (English article)
China’s BYD (HKEx: 1211) Wins Its Biggest Electric-Bus Order In US (English article)
Sina (Nasdaq: SINA) Adopts Continuation Of Previous Shareholder Rights Plan (PRNewswire)
Huawei Targets $5 Bln In Sales This Year For Honor Smartphone Brand (Chinese article)
Bottom line: The new Nokia-Alcatel merger, combined with a continued low-key lobbying campaign by Huawei could ultimately convince Washington to ease its ban on Chinese telecoms equipment within the next year.
US to rethink Huawei ban?
A couple of new reports are casting a spotlight on the troubled relationship between Washington and leading Chinese telecoms equipment maker Huawei, and raising the intriguing potential for a much-needed compromise that might end the impasse between the pair. The impasse is really quite one-sided, with Washington banning the sale of all Chinese telecoms equipment in the US due to concerns about the potential for spying. But this kind of policy seems a bit broad, especially amid an accelerating sector consolidation that is leaving wireless carriers with fewer and fewer networking equipment suppliers to choose from. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 28. To view a full article or story, click on the link next to the headline.
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iPhone Sales, China Boosts Apple (Nasdaq: AAPL); Shares Up Modestly (English article)
Lenovo (HKEx: 992) Eyes 100 Mln Cellphone Sales In New Fiscal Year – CEO (Chinese article)
Huawei CEO Says Chinese Cybersecurity Rules Could Backfire (English article)
Trina (NYSE: TSL) Signs Agreement In Hefei Zone for 300 MW DG Solar Power Plant (PRNewswire)
