The following press releases and news reports about Chinese companies were carried on March 4. To view a full article or story, click on the link next to the headline.
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Bottom line: The absence of most mid-sized Chinese smartphone brands from the world’s biggest telecoms show this week in Spain reflects their inability to mount serious global campaigns, and also growing financial pressures many are facing.
Mid-sized Chinese brands skip MWC
China’s crowded field of low-cost and mid-range smartphone brands may claim to have global aspirations, but you would never know that judging by their loud absence at the world’s biggest telecoms show this week in Spain. I’ll admit that I’m not personally attending this year’s Mobile World Congress in Barcelona, so I’m dependent on the show’s website and media reports to determine who is and who isn’t attending.
But based on my own findings, including talks with spokesmen from at least one of the big domestic brands, most companies are skipping this show that has emerged in recent years as a major venue for debuting new smartphones. There are several reasons for skipping the show, but I suspect that chief among those is costs. Read Full Post…
Bottom line: Huawei’s debut notebook PC will get mixed reviews and so-so sales due to its lack of experience, but future models will rapidly improve and propel the company to one of the world’s top 5 brands in the next 2-3 years.
Huawei rolls out MateBook PC
Fast-rising smartphone maker Huawei has formally rolled out its first PC model, and is saying quite boldly that its ultimately target in this new product area is struggling hometown rival Lenovo (HKEx: 992). The move comes a month after media first reported that Huawei would enter the stagnating PC space, where traditional desktop models are rapidly disappearing and even growth for portable notebook models is slowing sharply. (previous post)
The move isn’t a huge surprise, since lines are rapidly blurring between traditional notebook PCs and a newer generation of portable devices led by smartphones. Many large-screen smartphones, often called phablets, and tablet PCs are nearly as large as notebooks and have similar functions. Likewise, a growing number of notebook PCs now have detachable screens that can be used like a tablet PC. Read Full Post…
Bottom line: Lenovo’s longtime CEO Yang Yuanqing should resign or be replaced to make way for new leadership to turn around the company’s struggling mobile unit that will be critical to its future.
Lenovo attends Mobile World Congress
The global smartphone spotlight is in Barcelona this week, as industry giants including China’s Huawei and ZTE (HKEx: 763; Shenzhen: 000063) unveil their latest new models at the world’s biggest telecoms show. But one company that’s unlikely to generate much buzz is PC stalwart Lenovo (HKEx: 992), which has disappointed for the last 2 years by failing to gain traction in a smartphone business that will be critical to its future.
To the contrary, Lenovo saw its smartphone sales tumble last year in its home China market, which accounts for about half of its total revenue. The dramatic plunge is all the more worrisome since Lenovo was hoping for a surge last year after its purchase of Motorola, which once enjoyed a reputation as a global leader but later fell onto hard times. Read Full Post…
Bottom line: Huawei is likely to consolidate its position as China’s top smartphone brand this year, while Lenovo and Samsung could regain some market share as each mounts aggressive turnaround campaigns.
Huawei takes China smartphone crown
A year is almost like an eternity in the fast-moving smartphone world, and nowhere is that reality more on display than in the latest quarterly data on China’s cut-throat market. In the smartphone history books, 2015 will go down as the year that saw Huawei surge to become China’s largest player, with smaller homegrown brands Vivo and Oppo also making impressive gains. On the other side of the aisle, the year is one that former high-flyers Samsung(Seoul: 005930) and especially Lenovo (HKEx: 992) would rather forget, as both plunged out of the nation’s top 5 brands.
Smartphones are an extremely big business due to their high prices, a fact that has drawn numerous companies to the space and created intense competition in China. But constant changes to technology, combined with increasing commoditization due to the dominance of the free Android operating system, means that unknown companies can quickly rise to become major players. Similarly, a winner one year can quickly stumble to become a loser the next. Read Full Post…
Bottom line: Lenovo chief Yang Yuanqing is likely to resign or get replaced as company head by the end of this year as sales continue to stumble, possibly by recently named President Gianfranco Lanci from its European operations.
Lenovo looks at tough year ahead
If there’s a single word to summarize the latest quarterly results from struggling PC giant Lenovo (HKEx: 992), it’s “down”. Just about every major metric in its just-released results was down, though the company did manage to boost its net profit for the quarter thanks to recent aggressive cost cutting. But lowering costs isn’t a long-term formula for success, and investors are clearly worried about the prospects for Lenovo’s shriveling core PC business and a sputtering mobile device unit that is supposed to be its new growth driver.
Investors were clearly most spooked by Lenovo’s top line revenue, which shrank 8 percent to $12.9 billion in its latest quarter. That was the first time Lenovo has posted such a revenue decline in more than 6 years, and nicely summarizes the company’s struggles in just about all of its major product areas. Lenovo did achieve one notable milestone as its mobile device unit finally climbed from the loss column to break even. But even that is hardly an accomplishment since cost cutting was most likely the main driver behind that movement. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 4. To view a full article or story, click on the link next to the headline.
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Bottom line: Huawei’s new move into notebook PCs could seriously challenge the existing establishment, and it could become a top 5 brand by the end of next year.
Huawei moves into notebook PCs
Telecoms giant Huawei is making a surprise move into the PC market, with word that it will launch a new line of notebook models next month using chips supplied by Intel (Nasdaq: INTC). The move would put Huawei into direct competition with leading PC maker Lenovo (HKEx: 992), as it aggressively expands beyond its older networking equipment business and diversifies into consumer electronics.
Huawei’s move into notebooks isn’t a huge surprise, since such products are increasingly similar to the new generation of smartphones where Huawei has found recent success. Huawei already sells tablet PCs, which perform many of the functions as notebooks as well. But the move does represent an entire new product area for Huawei, and is almost certain to put the company on collision course with Lenovo in their home China market. Read Full Post…
Bottom line: Competition will remain fierce in China’s smartphone market this year, as major players including Huawei and Xiaomi compete aggressively with newcomers like LeTV for market share.
LeTV sets ambitious smartphone goal
The sputtering Xiaomi and high-flying LeTV (Shenzhen: 300104) have become 2 of China’s first smartphone makers to announce 2015 sales figures, as broader industry data show just how crowded the field has become. Xiaomi’s first-look sales figures come in a microblog post from one of its executives, and show the company missed its 2015 sales target by around 10 percent. LeTV’s figures come from an emailed statement, and say the company sold a relatively modest 4 million smartphones last year following its entry to the space.
Then there’s the broader industry data that points out 7 of the world’s top 10 smartphone brands last year came from China. That report notes that among the top 10, only Samsung (Seoul: 005930), Apple (Nasdaq: AAPL) and LG (Seoul: 066570) were non-Chinese, and that a surging Huawei overtook Lenovo (HKEx: 992) to become the world’s leading Chinese brand. Read Full Post…
Bottom line: Google’s new alliance with Lenovo and its rare response to rumors Chinese media rumors are the latest signals of its plans to launch an app store and sell its Nexus smartphones in China later this year.
Google Tangos with Lenovo
Google (Nasdaq: GOOG) has been in the China headlines twice these last few days, announcing a new tie-up with local PC giant Lenovo (HKEx: 992) and issuing a rare response to the latest rumors on its slow march back to the world’s biggest Internet market. These latest signals seem to show that a return to China is almost inevitable for Google, which wants to avoid a negative publicity backlash that will inevitably come when it announces the move later this year.
Google abruptly shuttered its China search service nearly 6 years ago, after Beijing refused the company’s demands to ease strict Chinese rules that require all Internet sites to self-police themselves for politically sensitive content. The closure and acrimony that followed carried a healthy dose of self-righteousness by Google, and thus a return to a market it once scorned might seem just a tad hypocritical. Read Full Post…
Bottom line: Lenovo’s plans to turn around its struggling smartphone business lack focus and are likely to fail, which could ultimately result in the exit of longtime chief Yang Yuanqing this year.
Lenovo denies plans to change Motorola logo
Computer giant Lenovo (HKEx: 992) was busy showcasing its latest PCs at a major trade show last week in Las Vegas, but industry watchers were far more interested in the outlook for its struggling smartphone business. That’s because 2016 could easily become a make-or-break year for Lenovo, which desperately needs to turn around a smartphone unit that will be critical to its future growth.
In response to a flurry of questions focused on its smartphones, talkative CEO Yang Yuanqing said his company is making steady progress in the BRICS markets of Brazil and India, and that he’s aiming to set Lenovo back on an upward track in its home China market. Lenovo also announced a vague new smartphone partnership with Google (Nasdaq: GOOG), and denied any plans to jettison its the famous bat-wing logo for its recently acquired Motorola brand.Read Full Post…
