Cellphones/Computers

Latest Business and financial news about Cellphones – Computers industry in China – YoungChinabiz Professional Magazine about Business in China

SMARTPHONES: Smartisan Gets New Funding, But From Where?

Bottom line: Smartisan’s new funding and plans to produce 5-6 smartphones a year look like an anomaly in the highly competitive market, and it’s unlikely to survive as a standalone entity over the next 5 years.

Smartisan gets new funding

I was a bit surprised to read that a clear second-tier smartphone player, the uppity Smartisan, has received 100 million yuan ($147 million) in new funding, as we begin the latest week of summer. I haven’t seen this company’s name or many second-tier players like OnePlus in more than half a year, though their collective names have come up quite a bit in the bigger smartphone numbers.

That’s a reference to the “other” category in the quarterly smartphone figures put out by data tracking firms like IDC, which show that this collective group that includes all names lumped together after the top 5 is rapidly losing share. In IDC’s latest China market data that came out last week, the top 5 vendors, Huawei, Oppo, Vivo, Xiaomi and Apple (Nasdaq: AAPL), collectively controlled 73 percent of the market. “Others”, including the likes of Smartisan, had to divvy up the remaining 26.9 percent. But what was most notably was that 26.9 percent marked a sharp decline from last year, when this group controlled 36.2 percent. Read Full Post…

SMARTPHONES: Xiaomi Comeback Marches On, But Will It Last?

Bottom line: Xiaomi’s rising market share and securing of $1 billion in new financing underscore its nascent turnaround may have some legs, even as its position remains tenuous in the cutthroat market.

Xiaomi unveils latest phone

Former smartphone sensation Xiaomi is in several headlines as we head into the close of the week, all of which seem to underscore that its nascent rebound may have some legs. But as anyone in the industry will tell you, any smartphone maker is really only as good as its last model these days, meaning fortunes can quickly turn with just one misstep. The smartphone sphere is littered with such examples of such missteps that ultimately led to corporate downfalls, including Samsung (Seoul: 005930), as well as former giants Nokia (Helsinki: NOK1V) and Motorola.

That said, Xiaomi is a slightly different case from that trio, since its initial rise to fame was really almost exclusively based on hype and savvy marketing rather than any cutting-edge product. The company is trying to correct that problem now by improving its product lineup, including the unveiling of its latest phone and upgrades to its own operating system. At the same time, media are reporting the company has received a new $1 billion loan, meaning banks still have some confidence in the firm, even if investors are skeptical. Read Full Post…

CONSUMER: Hon Hai, Hisense in Battle for Sharp Brand

Bottom line: A spat between Hisense and Sharp over the former’s use of the latter’s brand name spotlights the dangers of relying on such licensing agreements for Chinese companies going abroad.

Sharp sues Hisense over brand agreement

An entertaining battle is rippling through the headlines as we head into mid-week, pitting Taiwanese contract manufacturing titan Hon Hai (Taipei: 2317) against Chinese TV maker Hisense (Shanghai: 600060) in a battle for the Sharp (Tokyo: 6753) brand name. This is essentially the story of two giants with very little name recognition battling for a brand that, somewhat ironically, fell onto hard times as a company but still retains a relatively strong reputation.

Hon Hai is virtually unknown outside of industry circles, but is one of the world’s leading contract manufacturers that is most often cited as producer of iPhones for Apple (Nasdaq: AAPL). Likewise, Hisense is a relatively well-known TV maker in China, but is virtually unknown outside the country, creating obstacles for its global aspirations. Then there’s Sharp, the former Japanese electronics superstar that fell onto hard times was was taken over by Hon Hai last year. Read Full Post…

CHIPS: Chinese Buyer Makes Last-Ditch Effort at Lattice

Bottom line: Lattice Semiconductor’s sale to a Chinese buyer stands a 50-50 chance of getting national security clearance, benefiting from warming ties between the US and China and lack of defense-related technologies involved.

Lattice still trying to sell to Chinese buyer

More than a year after it first became an acquisition target for chip-hungry Chinese buyers, Lattice Semiconductor (Nasdaq: LSCC) is back in the headlines again with what looks like a last-ditch effort at salvaging a sale. Lattice is clearly a mid-sized maker of microchips that fits the profile of what Beijing would like to buy, with a market cap of about $840 million, as China tries to build up its own semiconductor sector that can compete with global giants like Intel (Nasdaq: INTC), Qualcomm (Nasdaq: QCOM) and TSMC (Taipei: 2330).

But western governments are wary of China’s aggressive ambitions, which include generous funds for M&A of Asian and western chip makers. A deal first announced more than a year ago saw one of the most aggressive buyers, Tsinghua Unigroup, buy a small stake in Lattice, but then fail to parlay that into an outright acquisition. Now another group, Canyon Bridge Capital Partners, is getting ready to make a third appeal for its plan to purchase Lattice in a filing to the regulator that reviews such deals for national security considerations. Read Full Post…

SMARTPHONES: Lenovo Eyeing CEO Change?

Bottom line: Yang Yuanqing is likely to cede his CEO title at Lenovo to recently returned executive Liu Jun soon, which could be followed by more risk taking and big changes to the company’s lackluster smartphone unit.

Lenovo’s Yang set to cede CEO title?

I used to make fun of mobile carrier China Unicom (HKEx: 763; NYSE: CHU) for its never-ending management reshuffles, but now the more respectable Lenovo (HKEx: 992) is quickly taking that title with its own series of nonstop personnel moves in a bid to right its sputtering ship. What’s interesting to note is that the series of moves are gradually creeping their way to the top of the company, meaning they could eventually unseat chief Yang Yuanqing, which is what I’ve been calling for all along.

This latest move would certainly be the highest yet, and follows Lenovo’s announcement last month of the reorganization of its China region that accounts for more than a quarter of its business. (English article) One part of that overhaul saw the return of former executive Liu Jun to the company to take a top position, and if the latest reports are true Liu could soon take over Yang’s title as company CEO. Read Full Post…

INTERNET: Crisis Grows for LeEco’s Coolpad, Yidao

Bottom line: Ongoing crises being faced by LeEco-backed Yidao and Coolpad are likely to deepen in the month ahead, as each company gets abandoned by its major stakeholder and is forced to grapple with rapidly deteriorating business.

Coolpad releases preliminary 2016 results

Two companies snapped up by former online video superstar LeEco (Shenzhen: 300104) are in the crisis headlines this morning, with smartphone maker Coolpad (HKEx: 2369) and car services operator Yidao both driving rapidly towards financial collapse. The first headline has Coolpad announcing preliminary results for 2016 that look quite alarming, as an ongoing back-and-forth with its auditor adds more worries to its story.

The second story has Yidao promising its increasingly unhappy unpaid drivers they will finally get their money late this month, as it tells the world it’s in the process of raising new funds. And if you believe that one, I have a nice bridge to sell you in Brooklyn. Read Full Post…

SMARTPHONES: Coolpad Losses Balloon, No Help in Sight

Bottom line: Money-losing Coolpad is likely to get sold before the end of this year to raise cash for controlling stakeholder LeEco, or could end up getting shut down if no buyer comes forward.

Coolpad to post big H1 loss

It’s a new week, and that means new chances to write about the struggles of companies in the orbit of fast-fading former video superstar LeEco (Shenzhen: 300104). Last week the company’s majority owned Yidao private car services was in the headlines, amid a he-said-she-said spat over 1.3 billion yuan ($189 million) in funds that Yidao said were “misappropriated” by its parent, leading to its own cash crunch that saw many of its drivers going unpaid.

If that wasn’t bad enough, now another one of LeEco’s assets, smartphone maker Coolpad (HKEx: 2369) is warning of ballooning losses due to plummeting sales in the fiercely competitive market. There are two subtexts here, the most obvious being that LeEco is hardly in any position to throw Coolpad a needed lifeline. The other is that LeEco’s own smartphone business is probably dying a rapid death, since it was theoretically going to use Coolpad to make at least some of its phones. Read Full Post…

VIDEO: LeEco Switches Off Vizio Deal, Cuts US Staff

Bottom line: LeEco’s scrapping of its Vizio purchase may be due to currency controls, but should be welcome by the company as a cash conserving move, and could presage a withdrawal of its investment in electric car maker Faraday Future.

LeEco scraps Vizio purchase

The first major pullback for cash-challenged LeEco (Shenzhen: 300104) is coming in the US, where the company is confirming the abandonment of its $2 billion agreement to buy no-name TV maker Vizio. At the same time, unconfirmed reports citing knowledgeable insiders are saying the company is cutting one-third of its headcount in the US. It’s not really clear if this pair of items are related, though both are certainly cost-cutting moves in a market where costs are quite high.

The next big move perhaps will see LeEco abandon its backing for Faraday Future, the electric car-making venture that’s building a $1 billion plant near Las Vegas. That deal is a bit more futuristic than the Vizio TV deal that’s now being abandoned, and is probably a bigger pet project of LeEco founder Jia Yueting. But the reality is that the company needs to conserve cash, and also that China’s foreign exchange regulator is making life difficult for anyone who wants to move money out of the country. Read Full Post…

SMARTPHONES: Xiaomi Chases Value, Dumps Apple Approach

Bottom line: Xiaomi’s adoption of Costco as its new role model and abandonment of Apple looks like a realistic move, and could better position the company to survive over the next 5 years amid a looming market shakeup.

Xiaomi eyes chic cheap image

Smartphone maker Xiaomi appears to be a company with an identity crisis, with reports that charismatic CEO Lei Jun has dumped former role model Apple (Nasdaq: AAPL) in favor a new model in US bulk-item supermarket operator Cosctco (Nasdaq: CSCO). Many will probably smile at this not-so-subtle shift at Xiaomi, which was one of China’s hottest companies just two years ago when Lei liked to think of himself as China’s Steve Jobs.

But the adoption of a new role model in Costco probably speaks volumes about how Lei sees his company going forward, as he tries to salvage its core smartphone business following a difficult last two years. That fall from grace includes a 40 percent drop in sales in its home China market in last year’s fourth quarter, causing its market share to slip to 7.4 percent, or about half of what it commanded just a year earlier, according to IDC. Read Full Post…

SMARTPHONES: Oppo Lands in India Protest Storm

Bottom line: A mass protest against Oppo in India over a Chinese manager’s desecration of the national flag won’t impact the company beyond a week or two, and reflects cultural sensitivity issues Chinese firms will face as they expand abroad.

Oppo under fire in India

Smartphone high-flyer Oppo is quickly learning the road to India isn’t always so smooth, with word of a mass protest at the company’s local operation due to a controversy involving desecration of the Indian flag. In this case the company appears to be learning a fast lesson in cultural sensitivity, which underscores one of the more subtle lessons that Chinese firms will need to learn as they expand abroad.

I doubt this particular incident will have any long-lasting impact on Oppo, though it will be interesting to see if it might affect its recent major cricket sponsorship deal in India. (previous post) The incident could also make Oppo think twice about its other big plans for the market, namely the building of a major production base there.  Read Full Post…

SMARTPHONES: Oppo Shows India Resolve with Cricket Deal

Bottom line: Oppo’s major new cricket sponsorship deal shows its commitment to India, but may have to be renegotiated if and when the company’s fortunes decline in the next 1-2 years following its meteoric rise.

Oppo in India cricket deal

Smartphone high-flyer Oppo is trying to show the world it’s serious about India, with word it will pay 1.1 billion yuan ($160 million) for rights to sponsor the nation’s national cricket team. News of the deal comes just three months after China’s top smartphone brand announced plans to build a production facility in the hotly contested India market, which has become a magnet for Chinese brands over the last year.

All that raises the question of whether Oppo is for real, or just another passing fad in China’s constantly changing smartphone landscape. That landscape has seen players like Lenovo (HKEx: 992), Xiaomi and Huawei become dominant players in the world’s largest smartphone market one day, only to rapidly fade the next. It’s obviously still too early to say if Oppo will follow in that trajectory, though my educated guess would be the answer to that question is quite possibly “yes”. Read Full Post…