Quiet has fallen over much of the blogosphere in this week before Christmas, though buzz was lingering around smartphone sensation Xiaomias it wrestled with a patent dispute that threatened to halt its nascent overseas expansion. Xiaomi chief Lei Jun was also full of congratulations for his company as it scored a court victory that partially lifted an order banning the sale of its phones in India. Meantime, Lei’s many friends and admirers were offering their congratulations as Xiaomi’s co-founder celebrated his 45th birthday.
Meantime, another courtroom battle saw the chief executive of online cosmetics seller Jumei International (Nasdaq: JMEI) reacting to a series of class action shareholder lawsuits filed against his firm last week. This kind of lawsuit is quite common, and usually comes anytime bad news causes a stock to suddenly drop. Still, the case was obviously an eye-opener for Jumei CEO Chen Ou, and serves as a good reminder of the many dangers that await Chinese tech firms that list overseas. Read Full Post…
Bottom line: LeTV’s new tie-up with Microsoft is mostly empty talk that’s unlikely to produce any meaningful results, and is part of a recent campaign to divert attention from problems at the company’s core business.
LeTV, Microsoft in cloud video tie-up
After several months out of sight while he received medical treatment, the charismatic CEO of online video company LeTV (Shenzhen: 300104) has come roaring back into the spotlight with a series of new initiatives to boost investor confidence and show he still has a long-term vision for his company. The latest of those has LeTV teaming up with software giant Microsoft (Nasdaq: MSFT) in a global alliance to operate what’s being billed as a cloud-based online video service. Read Full Post…
Bottom line: Uber will face a difficult time in its global expansion due to poor understanding of local markets and lack of control of its rental fleets.
By Lu Jin
Uber faces uphill road in China
In the last few days, while I was still pondering the big news about a $600 million investment by China’s leading search engine Baidu (Nasdaq: BIDU) in Uber (English article), the more powerful news broke that the car service provider had quadrupled its fares during the Sydney cafe hostage crisis this week in Australia. This kind of hasty and poorly conceived move convinced me once again that Uber’s global expansion will not succeed in many global markets, especially one like China. Read Full Post…
A national anti-corruption campaign at major state-run firms has filled the headlines these last few months, but a spate of smaller scandals last week cast a spotlight on another lower-profile problem that is far too common in China’s private corporate sector. That problem is deficient business ethics, which created embarrassments twice for smartphone sensation Xiaomi, and also for social networking app developer Momo (Nasdaq: MOMO) and security software specialist NQ Mobile (NYSE: NQ). Read Full Post…
Bottom line: The target of Qihoo’s rumored smartphone purchase could be Coolpad, while Xiaomi’s new tie-up with Midea could be followed by similar pairings in a broader drive to develop smart appliances.
Qihoo eying Coolpad?
A couple of big deals are bubbling around in the smartphone space today, led by yet another new tie-up involving smartphone sensation Xiaomi, this time with home appliance maker Midea (Shenzhen: 000333). But the hyperactive Xiaomi is having to share the spotlight with the edgier security software specialist Qihoo 360 (NYSE: QIHU), which is reportedly eying a deal for its own major smartphone acquisition worth up to $1 billion.
Each of these deals has slightly different motivating factors, but the central theme is that companies like Qihoo and Xiaomi increasingly see smartphones as a central element of larger suites of product and services rather than just a stand-alone product. In Xiaomi’s case, the company already counts smartphones as its core central product and is trying to build up an ecosystem of related products and services like smart TVs and air conditioners. Qihoo is eying smartphones as a vehicle for propagating its core software and Internet services. Read Full Post…
Bottom line: New copycat claims by a Japanese air purifier maker reflect the kinds of challenges Xiaomi will face as its profile rises, slowing down its global expansion and potentially undermining its cool image.
Xiaomi faces new coypcat allegations
The last couple of months have been a tough time for smartphone sensation Xiaomi, which is becoming a growing target of accusations that increasingly portray the company as China’s leading copycat. The latest such accusations are coming from a Japanese firm, which says its designs were ripped off for a new line of high-tech air purifiers that Xiaomi announced earlier this week. Those allegations come the same week that Xiaomi was penalized in India for illegally using patented technology from telecoms equipment giant Ericsson (Stockholm: ERICb), and 2 months after Xiaomi was slammed by a top Apple (Nasdaq: AAPL) executive for being China’s copycat supreme. Read Full Post…
Bottom line: NQ Mobile and Qihoo stocks are likely to come under pressure over the next 12 months due to ongoing questions about boardroom stability and aggressive accounting practices.
Qihoo independent board member resigns
“Scandal” seems to be the buzzword in China’s corporate Internet world this week, following the resignations of top officials at 2 of the nation’s leading security software makers, NQ Mobile (NYSE: NQ) and Qihoo (NYSE: QIHU). The former case looks the most serious, with NQ’s Chairman and co-CEO Henry Lin, also known as Lin Yu, resigning for murky reasons. Meantime, another one of Qihoo’s independent board members has resigned, following similar departures earlier this year, suggesting disagreement over aggressive accounting practices favored by the company’s opinionated CEO Zhou Hongyi. Read Full Post…
Bottom line: Momo’s stock should continue to perform well over the next few months as investors ignore a scandal around its CEO, while Spring Airlines stock should also debut strongly later this month in its newly approved IPO.
Spring Airlines approved for Shanghai IPO
It seems investors aren’t too concerned when CEOs of their companies are accused of corporate crimes, at least based on the strong trading debut for mobile social networking app maker Momo (Nasdaq: MOMO). Frankly speaking, I’m not surprised about the strong performance for Momo, whose CEO was accused of stealing property from his former employer NetEase (Nasdaq: NTES) and using that property to start up his new company. The fact of the matter is that such dishonesty and unethical behavior is quiet common in China’s corporate sector, and thus is unlikely to result in any punishment, be it a jail sentence or even negative investor sentiment. Read Full Post…
Bottom line: Xiaomi’s new smart air purifier looks like a good move to build up its ecosystem of interconnected smart devices, while LeTV’s new EV initiative is more likely a publicity ploy.
China’s entrepreneurial tech firms never miss a good business opportunity, and environmental plays are suddenly the flavor of the day with word of major new pollution-related plays by smartphone sensation Xiaomi and online video firm LeTV (Shenzhen: 300104). Xiaomi has announced it will enter the smart devices space with a new line of air purifiers aimed at consumers tired of breathing polluted Chinese air. Meantime, LeTV has announced its intent to get into the electric vehicle (EV) business, as China opens up that sector to encourage development of more clean technology. Read Full Post…
Bottom line: The visit by a top Chinese Internet official to Facebook’s US campus shows Mark Zuckerberg’s charm offensive toward China is producing results, which could see his company finally get permission to enter the market next year.
China Internet official Lu visits Facebook campus
I have to commend Mark Zuckerberg for his tenacity, after the Facebook (Nasdaq: FB) founder once again made headlines for receiving a visit from a top Chinese Internet official visiting the US. There are several interesting things about this latest development involving Zuckerberg’s endless quest to bring Facebook to China, beginning with the source of this latest news.
It turns out the news didn’t come from Facebook or even ordinary people who caught a glimpse of the meeting, but rather it came from the web page China.com.cn, an official government site under the State Council. (Chinese article) What’s more, the account was rather detailed and upbeat, and featured several photos of Zuckerberg chatting happily on the Facebook campus with Lu Wei, minister of the Cyberspace Administration of China. Read Full Post…
Bottom line: Momo’s IPO will go ahead but could debut weakly due to wrongdoing allegations against its CEO, while SouFun and Xunlei shares will be weak through 2015 due to a bad real estate market and stiff competition.
NetEase accuses Momo CEO of wrongdoing
The China Internet world is being rocked with scandals as we head into the end of the year, led by new allegations of wrongdoing against the founder and CEO of mobile social networking service Momo on the eve of its New York IPO. Meantime, recently listed online video site Xunlei (Nasdaq: XNET) is being rocked by accusations of putting pornography in some of its pop-up ads. Finally there’s leading real estate website SouFun (NYSE: SFUN), which is taking a hit after a highly-trumpeted agreement with a major real estate agency has fallen apart as China’s property market deteriorates. Read Full Post…
China’s entrepreneurial tech firms never miss a good business opportunity, and environmental plays are suddenly the flavor of the day with word of major new pollution-related plays by smartphone sensation Xiaomi and online video firm LeTV (Shenzhen: 300104). Xiaomi has announced it will enter the smart devices space with a new line of air purifiers aimed at consumers tired of breathing polluted Chinese air. Meantime, LeTV has announced its intent to get into the electric vehicle (EV) business, as China opens up that sector to encourage development of more clean technology. 
