Bottom line: Tsinghua Unigroup could end up scrapping its plans to bid for Micron due to fears of political resistance, while a new mobile OS that it’s backing is probably getting support from Beijing but is likely to fail.
China bid for Micron meets with early resistance
The recently acquisitive Tsinghua Unigroup is in a couple of headlines today, as the politically-connected company chases its dream of becoming China’s first IT products and services giant. The first headline has the company investing $100 million in a company developing a mobile operating system (OS) that could someday rival Google’s (Nasdaq: GOOG) Android and Apple’s (Nasdaq: AAPL) iOS. The second hints at the political resistance that Unigroup could meet as it reportedly gets set to make a $23 billion bid for leading US memory chip maker Micron (Nasdaq: MU), with reports that a powerful senator has concerns about the deal. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 16. To view a full article or story, click on the link next to the headline.
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McCain raises concerns about possible China bid for Micron Tech (Nasdaq: MU) (English article)
Huawei Gets Permission to Manufacture Cellphones in India (Chinese article)
China’s Tsinghua Gives $100 Mln to Android Challenger (English article)
Meituan to Acquire Chinese Travel Search Engine Kuxun – Source (English article)
HK Securities Regulator Orders Halt to Trading in Hanergy (HKEx: 566) (Chinese article)
Bottom line: Google could open a Chinese version of its app store by the end of this year and spend aggressively to quickly gain market share, but would face negative backlash from western critics for its U-turn back into the sensitive market.
Google lobbies China smartphone makers to include Play Store
Global Internet giant Google (Nasdaq: GOOG) is reportedly eying a return to China, with plans to launch a Chinese version of its flagship Google Play app store. The move, if true, would mark a major flip-flop for Google, which withdrew its core search engine from China in 2010 after a high-profile spat over Beijing’s strict censorship policies. But as many similarly principled companies quickly discover, China is a market that is simply too big to ignore.
That quandary led top business networking site LinkedIn (NYSE: LNKD) to enter China last year, despite expressing its own reservations about censorship, and top social networking (SNS) site Facebook (Nasdaq: FB) is also lobbying strongly for such a move. Google’s latest campaign comes in a the slightly less sensitive area of app store operation, though even that business would involve some self-censorship to eliminate apps that Beijing might consider sensitive for political or other reasons. Read Full Post…
Bottom line: Baidu’s temporary halting of updates for its mobile operating system is likely to become permanent, and looks like a smart move as it focuses on more efficient ways to boost its mobile market share.
Baidu stops supporting Yun OS
In a move that seemed inevitable, Internet search leader Baidu (Nasdaq: BIDU) has put the brakes on its 3-year-old mobile operating system (OS) that was sapping big resources with little or no chance for long-term success. The move comes just a month after Baidu trumpeted the growing contribution of mobile revenue to its overall business, surpassing traditional desktop PC search revenue for the first time in December. There’s no mention in Baidu’s latest quarterly report of how much of its mobile search revenue came from smartphones equipped with its self-developed mobile operating system, Yun OS, but I suspect the answer was “very little”. Read Full Post…
Bottom line: Alibaba’s Meizu investment is likely to spark a round of similar buying by major Chinese Internet firms, but could jeopardize Meizu’s access to the latest Android technology from Google.
Alibaba invests in Meizu
E-commerce giant Alibaba (NYSE: BABA) is finally making a smart acquisition to revive its flailing smartphone initiative, with word that it’s investing a hefty amount in the well-respected second-tier player Meizu. This particular investment comes just 2 months after another similar deal that saw security software specialist Qihoo 360 (NYSE: QIHU) form another tie-up with smartphone maker Coolpad (HKEx: 2369), and could auger a new wave of similar investments by Baidu (Nasdaq: BIDU), Tencent (HKEx: 700) and perhaps one or two other cash-rich Internet companies.
The news could provide some new breathing room for companies like Meizu and Coolpad, since they and many of their domestic peers are probably losing big money due to intense competition in China’s overcrowded smartphone space. But this new buying spree could also mean that competition is unlikely to abate anytime soon, since wealthy companies like Alibaba and Qihoo are unlikely to give up easily on their new smartphone initiatives. Read Full Post…
Bottom line: Google is likely to get Beijing’s permission to open a China version of its app store that could launch next year, paving the way for the roll-out of its smartphones in the market.
Google eyes China app store
A flurry of new reports are saying that global Internet giant Google (Nasdaq: GOOG) is planning to re-enter China by opening an app store there, in what would be a major strategic turnaround for the company. The real story of Google in China is quite complex, and to say it withdrew from the market in 2010 after a high profile spat with Beijing over censorship is quite an oversimplification. The more accurate story is one that’s seen Google diversify from its core desktop-based Internet services to an increasingly mobile portfolio that also includes a growing hardware component. That hardware element of its diversification could well be the focal point for a new China foray if the latest reports about Google’s plan to open a China app store are true. Read Full Post…
Sometimes reporting on China’s high-tech industries feels like being trapped in a world where the same things happen again and again, as Beijing and companies repeatedly make the same mistakes. The nation is famous for its boom-bust cycles fueled by companies piling into the latest hot products, leading to price wars and battles for market share before most players go bankrupt or leave the space. A similar phenomenon has occurred in computer operating system (OS) space, where China has tried repeatedly to foster development of products that can supplant Microsoft’s (Nasdaq: MSFT) dominant Windows OS and more recently Google’s (Nasdaq: GOOG) popular Android OS for smartphones. Read Full Post…
US software giant Microsoft (Nasdaq: MSFT) is the subject of 2 major news stories today, casting a spotlight on a pair of very different trends involving e-commerce and foreign companies in China. The first news bit has the world’s largest software company formally launching sales of its Xbox gaming console in China through a tie-up with JD.com (Nasdaq: JD), spotlighting the rapid rise of China’s second largest e-commerce company following its own tie-up with Internet giant Tencent (HKEx: 700) earlier this year. The second news bit looks more ominous, with word that Microsoft is being probed by one of China’s anti-trust regulators. Read Full Post…
A couple of new headlines are highlighting Apple’s (Nasdaq: AAPL) lackluster performance in China in the first part of this year, as the smartphone pioneer falls behind homegrown sensation Xiaomi and takes much needed steps to improve its China App Store. In one of the reports, media are saying that Apple trailed Xiaomi for the first time in the first quarter of this year. Meantime, another report is saying that Apple is embarking on a major drive to recruit more China developers to make local apps for its iPhone, since a strong selection of good apps is key to maintaining its popularity in the market. Read Full Post…
I wrote earlier this week about how the free Firefox mobile operating system (OS) could intensify the already fierce competition in China’s smartphone market, and now we’re getting word that such a development could come quite soon with the release of new Firefox models from local leaders Huawei and ZTE (HKEx: 763; Shenzhen: 000063). It’s no coincidence that all this news is coming out around the same time, since all the major smartphone and mobile chip makers are currently showcasing their latest wares this week at the Mobile World Congress, the industry’s biggest show held each February in Barcelona. Read Full Post…
The final death knell for one of China’s oldest software developers is casting a spotlight on just how difficult it is for companies to break into the global market for computer operating systems (OS). The end for Red Flag Software also bodes poorly for a number of more recent Chinese initiatives to create a mobile OS to rival Google’s (Nasdaq: GOOG) wildly popular Android and Apple’s (Nasdaq: APPL) own iOS. No specific reasons were given in the reports for Red Flag Software’s final demise, though I suspect defections by the company’s core state-run customers and a broader decline in the traditional desktop PC market were both factors. Read Full Post…
