Bottom line: Washington is likely to find Huawei guilty of illegally selling US equipment to Iran, while Germany is likely to scuttle a Midea-Kuka alliance by finding an alternate strategic local investor for Kuka.
US seeks documents from Huawei
Cross-border trade involving sensitive technologies is dominating the headlines as we head into summer, lead by a new development in Washington that looks ominous for Chinese telecoms giant Huawei. That news has the US asking Huawei for documents related to previous sanctions against the company, implying new sanctions could be coming over sales to Iran that may have violated US trade rules. The other headline shows opposition continuing to grow in Germany over a proposed purchase of 30 percent of local robotics firm Kuka (Frankfurt: KU2G) by Chinese home appliance giant Midea (Shenzhen: 000333). Read Full Post…
The following press releases and news reports about China companies were carried on June 3. To view a full article or story, click on the link next to the headline.
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Didi Chuxing, Uber Compete for Most Funds in Latest Drives (Chinese article)
Alibaba (NYSE: BABA) Announces Terms of Share Purchase from SoftBank (Businesswire)
China Says Midea’s (Shenzhen: 000333) German Robot Deal Shouldn’t be Politicized (English article)
Taobao Invests 28.2 Bln Yuan in Suning (Shenzhen: 002024), Becomes 2nd Largest Shareholder (Chinese article)
US Requests Documents From Huawei on Previous Trade Sanctions (Chinese article)
Bottom line: Xiaomi’s Brazilian retrenchment will ultimately become a withdrawal from the country, and reflects a lack of preparation and understanding when it entered the market a year ago.
Brazil vexes Xiaomi
The bad news keeps coming for sputtering smartphone maker Xiaomi, which is retrenching its Brazilian operation less than a year after entering the market. I have to admit that reports on this latest setback reflect a recent media fascination with any sort of failure for Xiaomi, which was once a media darling with its hip-and-trendy smartphones and slick marketing campaigns. But that said, this particular setback does look a bit more serious than some of the other recent bad news, as it appears to mark a big disappointment in a market where Xiaomi had big hopes. Read Full Post…
Bottom line: China should abandon its model of trying to develop proprietary technology through government-backed initiatives, and focus instead on supporting leading private companies like Huawei to develop such products.
Qualcomm JV developing special server chip for China
China has started down a familiar but flawed path to creating its own cutting edge-technology, with reports last week that a joint venture backed by US telecoms giant Qualcomm (Nasdaq: QCOM) is developing a special microchip for the China market for use in computer servers that power the Internet. The effort looks strikingly similar to previous ones that typically saw China work with big foreign companies to develop technologies to compete with existing global products and standards. Read Full Post…
The following press releases and news reports about China 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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Bottom line: Xiaomi’s rapid slide in China is unlikely to ease soon and it’s likely to fall out of the top 5 brands before year end, while Huawei’s lawsuit against Samsung reflects a new confidence with its recent rapid rise.
Xiaomi rapidly losing steam in China
New headlines are shining a spotlight on 2 of China’s best-known domestic smartphone brands, even though the fast-rising Huawei and rapidly sinking Xiaomi are moving in opposite directions. New data shows just how badly Xiaomi has slipped over the last year at home, where the former market leader is now in danger of dropping out of the top 5 following a huge decline in first quarter sales. Meantime, the same data show a continued surge for Huawei, which is showing its growing confidence by a filing a new patent lawsuit against global smartphone leader Samsung (Seoul: 005930). Read Full Post…
The following press releases and news reports about China companies were carried on May 25. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) in Talks to Buy Supercell Stake From SoftBank, WSJ Says (English article)
Huawei Sues Samsung (Seoul: 005930), Demands Royalties on Phone and Tablet Tech (English article)
Chinese Billionaire Chen’s Shanda Buys 11.7 Pct of LendingClub (NYSE: LC) (English article)
Tesla (Nasdaq: TSLA) May Push Back Plan for China Manufacturing (Chinese article)
Baidu-Affiliated (Nasdaq: BIDU) iQiyi Plans Backdoor A-Share Listing Next Year (Chinese article)
Bottom line: The 5 percent drop in China smartphone sales during the first quarter reflects the market’s current state of saturation, which will lead to more bankruptcies this year for suppliers and second-tier brands.
Xiaomi slips to third in China smartphone market
New data from China are shining a spotlight on the sudden slipping of global giant Apple (Nasdaq: AAPL) in the world’s largest smartphone market, as well as the slower decline of homegrown challenger Xiaomi. At the same time, the 5 percent decline in first-quarter shipments in the huge but intensely competitive China market bodes poorly for everyone. That includes a growing number of suppliers to the big brands like contract manufacturing giant FIH Mobile (HKEx: 2038), which has just warned that its profits are coming under intense pressure.
Much has been written about the effects that intense competition are having on Chinese smartphone brands, many of which are either barely profitable or are even losing money. But the toll has been even bigger on many of their suppliers like FIH, which makes phones for the likes of Xioami and Sony (Tokyo: 6758) and are coming under even bigger pressure due to slowing orders and cries from their customers for lower prices. Read Full Post…
The following press releases and news reports about China companies were carried on May 11. To view a full article or story, click on the link next to the headline.
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Some 4 years after disappearing from the headlines, a fourth telecoms carrier formed from China’s numerous regional cable TV companies is finally making a formal debut with its receipt of an official license to offer telecoms services. That means the new company, China Broadcasting Network Co (CBN), could theoretically shake up China’s laggard telecoms services industry that has been monopolized for years by the trio of state-run giants, China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA).
But anyone hoping for big change shouldn’t get too excited, since CBN is cut from the same cloth as the existing 3 state-run telcos. What’s more, the new company is likely to be plagued with internal power struggles, at least initially, since it was created from a patchwork of provincial cable TV companies whose former stakeholders may still try to exert some influence. Read Full Post…
Bottom line: Apple’s sudden loss of China market share to domestic rivals Huawei, Oppo and Vivo is a wake-up call that the tech giant needs to find new cutting-edge product areas to replace rapidly commoditizing smartphones.
Apple under pressure from China brands
The latest message for Apple (Nasdaq: AAPL) is coming in loud and clear from China, saying the company needs to find the next big thing if it wants to retain its crown as a global high-tech leader. That message has been playing out from numerous sources throughout this week, starting with Apple’s own latest financial results that showed its sales plummeted in China in the first quarter of this year.
That report was quickly followed by a flurry of new data from various research houses, all showing that Apple was rapidly losing China market share to homegrown up-and-comers like Huawei, as well as a recently rising duo of Oppo and Vivo. Adding insult to the injury was the disclosure by billionaire investor Carl Icahn that he recently dumped his Apple shares over concerns about the company’s eroding position in China. Read Full Post…
