I’ve been following the world of technology for more than a decade now, and so many big names have come and gone during that time that nothing really surprises me anymore, especially in the cellphone space where 2 years is the equivalent of an eternity. That seems like an appropriate backdrop for the latest smarphone data, which show that Huawei has come roaring out of nowhere to become the world’s third largest player, according to the latest quarterly figures from data-tracking firm IDC. (English article; Chinese article) At the same time, another recent Chinese fast-riser, ZTE (HKEx: 763; Shenzhen: 000063), has also cemented its place in the global top 5 by finishing at number 5. For anyone too lazy to connect the dots, that means that China now owns 2 of the top 5 spots in the important global smartphone market, with Huawei and ZTE collectively controlling about 9.2 percent of the market in the fourth quarter of last year, up from 7.5 percent a year earlier.
Journalist China
SMS At Start of Long Decline For Telcos 短信业务风光不再
New government data on mobile text messaging, also known as SMS, is underscoring how this former cash cow for China’s telcos is quickly losing its audience, forcing the carriers to quickly look for replacement revenue sources. The new data also adds some new perspective to the high-profile clash between leading telco China Mobile (HKEx: 941; NYSE: CHL) and top Internet player Tencent (HKEx: 700) that erupted last month, as the former accused the latter of stealing its SMS business.
Xiaomi In New Misstep With CCTV 小米与央视的新合作
I quite admire scrappy smartphone start-up Xiaomi for its savvy marketing tactics, but I’m beginning to have doubts about some of its more strategic choices after reading about its latest tie-up with the stodgy China Central Television (CCTV), China’s dominant state-run TV broadcaster. Xioami is in a challenging place in its development, as it tries to make the transition from a niche maker of low-cost, high-performance smartphones to a more mainstream company with a wider range of product and service offerings. The company in many ways is trying to follow in the footsteps of its idol, US tech giant Apple (Nasdaq: AAPL), which also has made the transition in the last 5 years from a relative niche player to the world’s biggest tech company.
Gome Cuts Online, As Dangdang Waits 国美和当当网或加强合作
Just days after announcing it would shutter its Hong Kong stores, we’re getting word that struggling home appliance and electronics retailer Gome (HKEx: 493) is also cutting positions in its online division as it looks to return to profitability. These latest job cuts look particularly interesting to me, as they seem to represent a retreat in the important but ultracompetitive e-commerce space, where rivals like Suning.com (Shenzhen: 002024) and Jingdong Mall continue to add staff even as everyone is losing massive money. In this case, Gome’s online cut-backs could perhaps presage a future strengthening of its current alliance with e-commerce specialist Dangdang (NYSE: DANG), and even result in a future marriage between these 2 companies whose e-commerce and traditional retailing businesses are quite complementary.
Cars: Donfeng-Volvo, VW Chases Low End 东风与沃尔沃联姻 大众进军中国低端汽车市场
A couple of news bits from the auto space are underscoring how competitive the sector has become, with domestic carmaker Dongfeng Motor signing a new tie-up with Swedish truck maker Volvo, as Germany’s Volkswagen (Frankfurt: VOWG) moves closer to entering the low-end market traditionally shunned by foreign names. Both of these cases show that big-name automakers, both domestic and foreign, will have to look for creative new ways to keep their business growing in the hyper-competitive Chinese market, and that the days where companies could simply construct a new multibillion-dollar factory to fuel additional growth may be in the past.
Huawei’s Ren: China’s “Wizard of Oz”? 华为任正非：中国的《绿野仙踪》？
I’m just coming back after a week’s absence, so thought I would mark my return by writing about one of my favorite subjects: Ren Zhengfei, the super-shy founder of telecoms giant Huawei Technologies. I don’t usually believe in conspiracy theories, but if I did I might be starting to wonder if Ren is really the powerful and insightful person Huawei keeps describing for us. Instead, I might be starting to wonder if perhaps Ren was a myth created for public consumption, much like the title character in the famous novel “The Wizard of Oz” turned out to be a modest, largely powerless man instead of the powerful wizard he wanted everyone to believe he was.
Suning Stumbles in E-Commerce 苏宁易购未实现去年营收目标
I’ve been writing for most of the past year about China’s bloody e-commerce battles, and now we’re getting some figures that finally show how bad the situation is with news that up-and-comer Suning (Shenzhen: 002024) has missed its 2012 online sales target by a relatively large margin. This bad stumble reflects the fact that China’s e-commerce market may have big potential, but the overall space is still limited in size. What’s more, with so many big names fighting for a piece of the pie, everyone is having to sell their products at very low prices that ultimately result in lower overall revenues and operating losses.
Lenovo M&A Addiction Targets Sharp 联想或收购夏普南京电视机工厂
Despite his recent promises that he wouldn’t pursue any new major M&A, Lenovo (HKEx: 992) chief Yang Yuanqing appears to be addicted to purchasing global assets, as reflected by the latest news that he is exploring a potential new tie-up with struggling Japanese electronics maker Sharp (Tokyo: 6753). I’ve previously said that Yang’s addiction to M&A will result in some major challenges for Lenovo in the next few years, as it faces the difficult task of integrating various recently acquired assets in such diverse markets as Japan, Brazil and Germany.
Baidu Becomes Latest Sina Weibo Suitor 百度有意投资新浪微博
The list of companies looking to invest in Sina’s (Nasdaq: SINA) Weibo microblogging platform continues to grow with word that online search leader Baidu (Nasdaq: BIDU) has become the latest suitor to woo the popular social networking site (SNS). Word of Baidu’s interest comes weeks after e-commerce leader Alibaba was also reportedly seeking a similar tie-up with Sina, though that deal was said to have reached an impasse after the companies failed to agree on a price. (previous post) Frankly speaking, all 3 of these leading Internet companies seems to be a bit hyperactive at the moment with unrelated internal activities, prompting me to wonder if each potentially has too many distractions to craft a deal that will ultimately be good for anyone.
Apple Invests in China — Finally 苹果终于在华投资
For a company of its size, Apple (Nasdaq: AAPL) has been surprisingly conservative about its investments in China, opening just a few of its trademark stores in a country that is already one of its top global markets but otherwise making few major investments. But that could soon change with talk that the world’s biggest tech company is aiming to open a research and development center in China, which has become an unspoken prerequisite for any company that hopes to successfully do big business in the country. Apple clearly needs to think about such high-profile, big investments in China if it ever wants to streamline some of the bureaucracy that has kept some of its most popular products out of the market for months after their global launches.
Ma Yields For New Alibaba Top Manager 马云宣布将卸任阿里巴巴CEO
It seems like nothing happens at e-commerce giant Alibaba these days that isn’t interpreted in terms of its implications for the company’s upcoming mega-IPO, and the latest announcement that founder Jack Ma will step down from his CEO position isn’t any different. From my perspective, this kind of move was almost inevitable, and should be a good one for Alibaba in the run-up to what is likely to be China’s biggest-ever IPO for an Internet company sometime between this year and 2015. After all, Ma has always been a very strong salesman and a “big picture” guy, and it’s become increasingly clear that he wants to focus on the strategic direction for his company rather than day-to-day managerial issues that have become increasingly important as Alibaba grows in size and complexity.
