Bottom line: Huawei may have lost its top position in China’s smartphone market in the third quarter, while Xiaomi’s new model with a screen that takes up the entire front surface could bring some buzz back to the company.
Huawei loses ground in China smartphone race
A trio of smartphone headlines nicely summarize the rapid changes constantly gripping the space, where today’s superstar can become little more than a footnote in just a year. The latest rising superstar Oppo is leading the headlines, with a new report saying it overtook Huawei to become China’s smartphone leader in the third quarter. Meantime, former market leader Xiaomi is also in headlines as it rolls out a new intriguing model in a bid to regain its former glory. Last but not least is the faded ZTE (HKEx: 763; Shenzhen: 000063), one of the industry’s oldest players, which is changing smartphone chiefs in its own bid to find new relevance in the tough market. Read Full Post…
Bottom line: Sohu may be forced to separately sell off its portal, video, search and gaming units over the next 1-2 years, or risk seeing them gradually fall in value as the company’s losses mount.
Sohu plunges after latest results
After running for years as a solid second-tier player, Internet veteran Sohu (Nasdaq: SOHU) is finally showing signs of running out of steam, based on its latest quarterly results and word of a major new loan to the company from its cash-rich but fading Changyou (Nasdaq: CYOU) gaming unit. This kind of turn isn’t all that surprising, since status as a second-tier player should only be temporary and such companies should either aspire to top-tier positions or sell themselves to rivals to ensure their longer term survival.
But Sohu has defied such pressures, largely due to the fiercely independent nature of its founder Charles Zhang, who is both quite shrewd but also famously averse to giving control of his empire to others. These latest results show that Zhang may soon have no choice but to sell some or all of his company, or risk seeing it slowly relegated to oblivion due to pressure from better-run rivals. Read Full Post…
Bottom line: HNA’s $6.5 billion investment in Hilton marks a new high point in Chinese global hotel buying, and signals the trend may be cresting and a downturn could come next year.
HNA invests in Hilton
After I said just last week that China’s recent buying binge of foreign hotels may have crested, we’re seeing yet another blockbuster deal that seems to support that thesis. This latest deal is the biggest to date, and has the acquisitive HNA Group buying 25 percent of US hotel giant Hilton (NYSE: HLT) for about $6.5 billion. That would easily eclipse the other recent blockbuster deal announced just last week, when insurance giant China LIfe (HKEx: 2628; Shanghai: 601628; NYSE: LFC) said it was leading a Chinese group that would invest $2 billion in a portfolio of lower-end US hotels. (previous post) Read Full Post…
In 6 years of living in Shanghai, I’ve come to discover my adopted China hometown has a major common characteristic with my US adopted hometown of Los Angeles. Both are major cities that are quite comfortable for people who live there, but are far less notable as tourist destinations.
In this week’s Street View, our city is in the headlines for major new plans that promise to make huge swaths of land on both sides of the Huangpu River friendlier for not only local residents but also tourists. I’ve seen the main plan discussed several times before, but the latest reports say work is already nearing completion on creation of continuous spaces that will allow people to walk for long distances on both sides of the river. Read Full Post…
The first third-quarter smartphone sales data are out, revealing that Huawei retained its leading position in the fiercely competitive Chinese market. But the high flying Huawei also saw its share drop by more than one percentage point, indicating its momentum may be slowing. At the same time, other reports are saying that Meizu, the Alibaba-backed (NYSE: BABA) smartphone brand that isn’t in the China top 5, has signed on a small group of new investors in a deal that hints at a possible upcoming IPO.
Let’s jump right in with the big-picture numbers, which are coming in new quarterly data from TrendForce. According to that data, Huawei controlled 19.1 percent of the Chinese smartphone market in the third quarter, down from 20.4 percent in the previous quarter. (Chinese article) Total smartphone sales in China reached 168 million for the quarter. Read Full Post…
Bottom line: China’s Wanda Group will continue a recent trend of hunting for top global talent to build its growing entertainment empire, as it seeks to challenge the likes of Disney.
The aggressively expanding Wanda Group is filling up its ranks with foreign-trained China veterans as it tries to challenge the likes of global names like Disney (NYSE: DIS) with moves into the movie and theme park spaces. Now the company is going on a major shopping spree for top talent from some of those companies, led by new reports that it has just poached a top Disney theme park executive to head its own theme park division. At the same time, other reports are pointing out that Wanda also recently hired Google’s (Nasdaq: GOOG) former top China executive to help lead its Internet division. Read Full Post…
Bottom line: Homestay specialist Tujia could make a play to merge with the China operations of Airbnb, following its major new tie-up with leading online travel sites Ctrip and Qunar.
Ctrip ties with Tujia
Leading online travel agent Ctrip (Nasdaq: CTRP) is back to doing what it knows best, neutralizing competition through formation of savvy alliances with its rivals. In this case the company is taking aim at the market for short-term stays at private homes, with its announcement of a major new tie-up with homegrown industry leader Tujia. That alliance is seeing Ctrip merge its own homestay business with Tujia, in what looks like a clear shot at global leader and sector pioneer Airbnb. Read Full Post…
Bottom line: Wal-Mart’s deepening alliance with JD.com looks like a smart pairing of leaders in traditional and online retailing, while a new e-commerce joint venture between Alibaba and Suning doesn’t appear to offer anything new.
Wal-Mart opens Sam’s Club on JD.com
Leading Chinese e-commerce operators Alibaba(NYSE: BABA) and JD.com (Nasdaq: JD) are in a series of similar headlines, as each looks for growth opportunities by pairing with traditional brick-and-mortar retailers. Industry leader Alibaba has just announced a rather vague joint venture with leading electronics retailer Suning (Shenzhen: 002024), a year after the pair formed a major equity tie-up. Meantime, JD.com has announced that global retailing giant Wal-Mart (NYSE: WMT) will open 2 major stores on its e-commerce platform, as part of a growing alliance between the pair that also kicked off with a major equity tie-up 3 months ago. Read Full Post…
The following press releases and news reports about China companies were carried on October 21. To view a full article or story, click on the link next to the headline.
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China Mobile (HKEx: 941) Announces Financial Results for First 3 Quarters (HKEx announcement)
Homestay Business of Ctrip (Nasdaq: CTRP) and Qunar Acquired by Tujia (PRNewswire)
China iOS App Store Passes US in Sales to Become World’s Largest – Report (Chinese article)
Walmart (NYSE: WMT) Opens Flagship Store on JD.com (Nasdaq: JD) (Chinese article)
Giant Interactive to Buy Online Game Maker Playtika for 30.5 Bln Yuan (Chinese article)
Bottom line: LeEco’s new US launch for its TVs, smartphones and video service is almost guaranteed to fail due to underwhelming product offerings and stiff competition.
LeEco launches phones, TVs in US
A year after opening its US e-commerce site, online video superstar LeEco (Shenzhen: 300104) has finally launched some of its leading products in the world’s biggest but also one of its most competitive markets. LeEco, formerly known as LeTV, announced it will start selling its smartphones and smart TVs in the US, as well as a new customized version of its core online video service. My main response to this aggressive and ambitious push is: Good luck!
I’ve been a big LeEco doubter for a while now, since the company has gone from relatively obscurity to superstar in just a couple of years through a series of aggressive expansions fueled mostly by taking on new investors and selling its overvalued stock. Its name change from LeTV to LeEco nicely summarizes its aspirations, since the company now bills itself as developer of an ecosystem that delivers entertainment content over a range of devices and services. Read Full Post…
Bottom line: Apple will need to lower its prices to stabilize its position in China, while Huawei could also soon face pricing pressure due to growing challenges from up-and-comers like Oppo and Vivo.
Huawei’s sales surge in Q3
Two of China’s top smartphone brands have been in the headlines in recent days, spotlighting a rapid ascension of the homegrown Huawei and the equally rapid decline of global giant Apple (Nasdaq: AAPL).
On the upside of the story, the surging Huawei announced it recently passed the 100 million mark in smartphones produced this year, reaching the milestone two months faster than in 2015. Meantime, Apple’s CEO was in China for at least the third time this year, announcing a new research and development center in a push to revive his company’s fast-fading position in its largest market after the United States. Read Full Post…
