Bottom line: Xiaomi’s latest headaches in India due to a technical glitch are just one of many growing pains it will experience more frequently due to its rapid expansion, as it targets developing markets under its push to become a global brand.
Xiaomi prepares to launch in Brazil
Xiaomi is fast becoming the unofficial smartphone of the BRICS, with word that it’s getting ready to start producing its signature phones in India as it also gets set to launch in Brazil next month. The company is also likely to enter Russia later this year, leaving South Africa as the only BRICS country missing from its global footprint by the end of 2015.
At the same time, Xiaomi’s ride into India has been quick but also bumpy, starting with a patent dispute last year and now including a problem that has seen its latest model in the market, the Mi 4i, experience overheating problems. Those kinds of problems will only be magnified in more developed western markets, which is why Xiaomi says it won’t be selling its smartphones in North America or Europe anytime soon. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 26. To view a full article or story, click on the link next to the headline.
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Didi Kuaidi Meet Driver Opposition Post-Merger, May Target Q4 IPO (Chinese article)
Foreign Drugmakers Face More Pressure to Lower Prices in China (English article)
Bottom line: LeTV’s strong smartphone launch shows that stiff competition in China won’t ease soon, which could push Lenovo’s mobile operations further into the red and prompt ZTE to further lighten its efforts in the market.
LeTV smartphones make strong debut
A series of smartphone items are in the headlines as we close out the week, spotlighting the tough situation in a China market that is at once the world’s largest but also extremely competitive. That competition just got a bit louder, with the first headline that says new arrival LeTV (Shenzhen: 300104) debuted quite strongly with when its first smartphone models went on sale this week. Meantime, industry stalwarts Lenovo (HKEx: 992) and ZTE (HKEx: 763; Shenzhen: 000063) continue to reflect the stresses of selling in China, with the former posting a big loss for its mobile business last year while the latter continues to lighten its reliance on the market by looking for growth in the US. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 15. To view a full article or story, click on the link next to the headline.
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Lenovo (HKEx: 992) To Spin Off Smart TV Unit As JV With Alibaba (NYSE: BABA) (English article)
Youku Tudou (NYSE: YOKU) In Merger Talks With iQiyi – Market Talk (Chinese article)
Xiaomi Smartphone Sales Rise 36 Pct To 15 Mln Units In Q1 (Chinese article)
Sina (Nasdaq: SINA) Reports Q1 2015 Financial Results (PRNewswire)
Bottom line: Apple is likely to reach a deal to bring Apple Pay to China in the next 12 months, while Xiaomi’s addition of traditional offline sales channels acknowledges it needs to diversify its approach to maintain its breakneck growth.
Cook eyes Apple Pay for China
The old saying “An apple a day” seems to be appropriate this week in China, where Apple’s (Nasdaq: AAPL) CEO Tim Cook is being quite talkative on his latest China trip with a steady stream of small but noteworthy news. He began the week by announcing a new environmental China initiative for Apple, then followed by launching his own microblog on the locally popular Sina Weibo (Nasdaq: WB), often called the Twitter of China. (previous post)
Now he’s candidly talking about hopes for bringing his company’s Apple Pay electronic payments service to China, perhaps through tie-ups with local e-commerce giant Alibaba (NYSE: BABA) or UnionPay, China’s largest electronic transactions network operator. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 13. To view a full article or story, click on the link next to the headline.
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Xiaomi Begins First Official Offline Sales As It Chases High-End (Chinese article)
58.com (NYSE: WUBA) Lays Off More Than 3,000 From Newly Acquired ChinaHR (Chinese article)
Meraas, Alibaba (NYSE: BABA) In Middle East Big Data And Cloud Computing JV (Businesswire)
Apple’s (Nasdaq: AAPL) Cook Says Aims To Bring Apple Pay To China (Chinese article)
Uber Says Has Reached Consensus With Chengdu Government, Following Probe (Chinese 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: Beijing should be commended for its recent program to open up telecoms services to private investment, and should consider accelerating the program and allowing in foreign participation.
Beijing injects competition into telecoms services
A campaign to bring private money into China’s telecoms sector was in the headlines twice over the last 2 weeks, reflecting a broader Beijing campaign to inject new life into traditional sectors like banking and energy that are now dominated by large and often slow-moving state-run firms.
One headline came late last week, when media reported that 20 million new phone numbers would be injected into a year-old program allowing private companies to sell mobile service. That followed even bigger news a week earlier, when media said the telecoms regulator hoped to allow private investors to build domestic telecoms network infrastructure for the first time. Read Full Post…
Bottom line: LeTV’s new smartphones should generate major buzz when they go on sale this weekend and could easily sell 1 million units in their first 3-4 months, challenging domestic “cool” incumbent Xiaomi.
LeTV takes pre-orders for new smartphones
Smartphone sensation Xiaomi has emerged as one of China’s hottest tech names in the last few years with its cool and trendy image, focusing its sights largely on global leaders Samsung (Seoul: 005930) and especially Apple (Nasdaq: AAPL) as it looks for a place on the global stage. But this globally-minded company could soon have to watch its back as well, with the recent meteoric rise of LeTV (Shenzhen: 300104) as the newest hipster in town.
LeTV went largely unnoticed for the first part of its life, when it was mostly an Internet-based provider of video content similar to YouTube. But it has zipped into the spotlight over the last year, first as it posed a serious challenge to China’s traditional broadcasters and now as it rolls out its own new line of smartphones. Read Full Post…
Bottom line: The revocation of global certification for Qihoo’s security software by 3 European bodies will undermine the company’s credibility and hamper its drive to go global, putting pressure on its stock for the next few months.
European bodies revoke Qihoo accreditation
Security software specialist Qihoo 360 (NYSE: QIHU) is finding itself in the middle of a global scandal, with word that several European accreditation bodies have refused to certify its core security software products due to the company’s misleading business practices. The case comes as an embarrassment to Qihoo, which is used to and largely ignores such scandals when they occur in its home market where such practices are relatively common.
But as Qihoo and its peers attempt to go global, they are quickly discovering that many of the things they do at home fall well below the standards set by global bodies, especially in the west. That won’t be too helpful for Chinese tech giants like Qihoo, Baidu (Nasdaq: BIDU), Xiaomi and Alibaba (NYSE: BABA), which are all trying to show the world and investors that they can compete outside their highly protected home market where standards are often a bit lower than in the west. Read Full Post…
Bottom line: Ant Financial’s bid for a stake in Indian smartphone maker Micromax reflects Alibaba’s recent focus on India, as it seeks to expand to markets where it can quickly grow and justify its high valuation.
Alibaba unit eyes Micromax investment
E-commerce giant Alibaba (NYSE: BABA) appears to have its sights set on India, with word that the company’s financial arm is leading a group that could invest $1 billion or more for a stake in local smartphone giant Micromax. The reported bid is being led by Ant Financial, which is separately run from Alibaba and has no equity relationship with the US-listed e-commerce giant. But such a bid would clearly be part of Alibaba’s broader global expansion, as it tries to justify its lofty valuation following a record IPO last September. Read Full Post…
