Bottom line: Lenovo and other Chinese firms need to abandon their approach that targets declining, older brands for global M&A, and instead focus on organic growth and more strategic assets with better growth potential.
Lenovo eyes Fujitsu’s PC business
The acquisitive Lenovo (HKEx: 992) was in M&A headlines again last week, when media reported it was in talks to buy the aging PC business of Fujitsu, an operation that is largely inconsequential outside its home Japanese market. Such a purchase would continue a trend dating back more than a decade, which has seen Lenovo purchase declining global brands for bargain prices with hopes of resuscitating those names to expand its global footprint. Read Full Post…
Bottom line: NetEase’s move into cloud computing and closure of its forum service are part of an overhaul positioning it for future growth, and could propel it into China’s top 3 Internet companies in the next 5 years.
NetEase launches cloud service
China’s lowest-key Internet giant NetEase is making some more new adjustments, extending reports last week that it was planning to spin off or sell its old but stagnating web portal business. One of the new moves includes word that the company has shuttered its equally slow-growth web forum business. The other has the company launching a new cloud service, with plans to pump hundreds of millions of dollars into the business over the next few years. Read Full Post…
Bottom line: A new PR campaign by Huawei and Microsoft to ease Washington and Beijing cybersecurity concerns that are hurting their cross-border business will have limited impact, and what’s really needed is better technology to prevent against hacking.
Huawei, Microsoft in odd new alliance
The growing paranoia in Beijing and Washington over cybersecurity threats is creating odd bedfellows of two of the world’s leading tech companies on opposite sides of the Great Firewall of China. That pairing is bringing together software giant Microsoft (Nasdaq: MSFT), one of the biggest China boosters among US tech firms, with Huawei, a globally ambitious Chinese company that would desperately like to enter the lucrative US market for telecoms networking equipment. Read Full Post…
Bottom line: Apple’s decision to keep iPhone 7 prices in China roughly the same as the 6s is aimed at reversing its sliding sales, but won’t have much effect due to lack of major new features and stiff competition from domestic rivals.
Apple holds firm on iPhone 7 prices in China
Despite skidding sales and early bets that its latest smartphone won’t do well in China, Apple (Nasdaq: AAPL) won’t be giving any bargains to its fans in the world’s biggest smartphone market, according to newly released global prices for the iPhone 7. The move comes as a bit of a surprise, since Apple desperately needs to reverse its recent downward plunge in China, which is now its second biggest global market after only the US. But a number of factors are at play here, including a rapidly devaluing Chinese currency and also Apple’s hesitation to lower its prices into the same realm as some of its fast-rising homegrown Chinese rivals. Read Full Post…
The following press releases and news reports about China companies were carried on September 14. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China Postal Savings Bank $8.1 Bln IPO Mostly Covered by Cornerstone Investors (English article)
LeEco (Shenzhen: 300104) Launches Smartphones in Russia (Chinese article)
Microsoft (Nasdaq: MSFT), Huawei Join in Cybersecurity Message (English article)
NetEase (Nasdaq: NTES) Plans to Spin Off News Unit for IPO or Sell for $300 Mln (Chinese article)
Second-Hand Car Site Guazi Raises $250 Mln, to Spend 1 Bln Yuan on Ads (Chinese article)
Bottom line: UnionPay’s announcement that its cards are usable at nearly all US ATMs shows it is targeting local US customers, while stiff competition will limit the success of new Xiaomi and Huawei e-payment services.
UnionPay makes big gains in US
It’s been a busy week for Chinese companies in the electronic payments headlines, with 3 major names making big moves in the space. Leading the pack is industry stalwart UnionPay, China’s equivalent of MasterCard (NYSE: MA) and Visa (NYSE: V), which is saying its own credit cards are now accepted by an impressive 80 percent of US merchants. The other headlines are coming from smartphone makers Huawei and Xiaomi, which have announced roll-outs for China-based electronic payment services that will compete with other similar products from Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930). Read Full Post…
Bottom line: Apple’s announcement of its first China R&D center looks like a hastily crafted initiative aimed at generating positive publicity, but is unlikely to halt its recent slide in the market.
Apple announces first China R&D center
Just a day after new data showed just how badly Apple(Nasdaq: AAPL) is stumbling in China, the iPhone maker has finally taken a step it should have made long ago with the announcement that it will build an R&D center in the country. Apple’s hesitation over such a move has been quite embarrassing, especially since China has surged to become its second largest market in the last 3 years. The lack of such investment is also embarrassing for China because India, a much smaller market for Apple, became the first Asian recipient of an R&D center from the US tech giant earlier this year. Read Full Post…
Bottom line: Lei Jun’s resignation as YY chairman to focus on his struggling Xiaomi reflects his own fading star power, while Huawei is unlikely to reach its goal of taking 10 percent of the India smartphone market by the end of next year.
Lei Jun steps down as YY chairman
A couple of smartphone stories are in the headlines on this final day of the work week, capping a flurry of industry news that reflects the turmoil in China’s overheated market. Both items are relatively second-tier news, led by the resignation of Lei Jun from his position as chairman of social networking site YY (Nasdaq: YY) to focus on reviving his ailing Xiaomi smartphone empire. The other item has market leader Huawei hyping India, where it is getting set to launch a manufacturing facility and has ambitious plans for taking 10 percent of the market. Read Full Post…
The following press releases and news reports about China companies were carried on August 17. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Apple (Nasdaq: AAPL) to Open First Independent Asia Pacific R&D Center in China (Chinese article)
Former Huawei Honor Brand President Named as Coolpad (HKEx: 2369) CEO (Chinese article)
Bottom line: The latest quarterly smartphone data show Oppo could soon take China’s smartphone crown from Huawei, whose rapidly slowing sales could cause it to badly miss its 2016 target.
Oppo closes in on China smartphone crown
Recent trends in China’s fiercely competitive smartphone market are accelerating in the latest quarterly data, led by a plunge in sales and market share for Apple (Nasdaq: AAPL) and sharply slowing growth for local leader Huawei. At the same time, the surging Oppo continues its meteoric rise to cement its position as China’s second largest smartphone maker, as it closes in on Huawei.
All that said, the smartphone crown for China, the world’s biggest market, is shaping up to be quite a hot potato that changes hands often. Just 3 years ago that title belonged to Samsung (Seoul: 005930), which was later supplanted by Xiaomi, a former superstar that barely made the top 5 in the newly released second-quarter rankings from IDC. (press release) Apple has also briefly held the title, only to be overtaken last year by current leader Huawei. Read Full Post…
Bottom line: LeEco’s rescue plan for Coolpad will fail due to stiff competition in China’s smartphone markets and overly ambitious targets for its own new line of smartphones.
LeEco ousts Coolpad CEO
Less than 2 months after becoming the largest stakeholder of Coolpad (HKEx: 2369), online video sensation LeEco (Shenzhen: 300104) is wasting no time in making major changes at the struggling smartphone maker. The most symbolic of those has LeEco’s dynamic founder Jia Yueting ousting Coolpad’s chairman and CEO and taking over the chairman’s position for himself. More substantially, LeEco is indicating it will become Coolpad’s largest customer going forward as part of its own plans to build an entertainment ecosystem around devices like Internet-connected smartphones, TVs and cars. Read Full Post…
