Bottom line: Apple could be on the cusp of a prolonged China downturn unless it can roll out smartphones with new breakthrough technology, as it gets overwhelmed by similar Chinese models that sell for far lower prices.
Apple China sales tumble 33 pct in Q2
The latest financial report from Apple (Nasdaq: AAPL) shows the company continues to struggle as sales of its core iPhones pass their prime, and nowhere is that story more apparent than in China. The company’s Greater China sales, which also includes Hong Kong and Taiwan, fell 33 percent in its latest reporting quarter, accelerating from an already sharp drop of 26 percent in the first 3 months of this year.
The rapid decline dropped China to Apple’s third largest market globally from its former spot as the company’s second largest, with Europe taking over the number two position. Apple’s story is hardly unique, as the world’s other global leader Samsung (Seoul: 005930) has also seen a sharp reversal over the last year after its own recent rise to take the global smartphone crown. Read Full Post…
Bottom line: Recent calls for boycotts of KFC, iPhones and McDonald’s by Chinese patriots are unlikely to result in long-term damage for any of the companies, but could become a problem if any of China’s ongoing territorial disputes escalate.
Chinese patriots call for KFC boycott
It seems China’s restless patriots are back at work following a 4 year break, venting their latest anger at the US by smashing Apple (Nasdaq: AAPL) iPhones and calling for boycotts of KFC. This particular bout of Chinese patriotism follows a ruling 2 weeks ago by an international court that found in favor of the Philippines in a territorial dispute with China. The last major bout of similar patriotism came back in 2012, and involved another territorial dispute between China and Japan. But in that instance, Beijing gave much freer rein to many of the patriots, which resulted in long-term Chinese sales declines for the big Japanese automakers. Read Full Post…
The following press releases and news reports about China companies were carried on July 28. To view a full article or story, click on the link next to the headline.
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Greater China Loses Status as Apple’s (Nasdaq: AAPL) Second Largest Region (Chinese article)
Wanda Buys Movie Portal Mtime for $280 Mln (Chinese article)
Sale of Yum Brands (NYSE: YUM) China Franchise at a Standstill (English article)
Alibaba (NYSE: BABA) Bids for East Europe’s Top Online Auction Site Allegro (Chinese article)
Xiaomi Launches Notebook Computer With Starting Price of 3499 Yuan (Chinese article)
Bottom line: Huawei’s eroding profit margins and slowing smartphone sales growth reflect stresses being felt both at home and abroad in an overheated industry showing rapid signs of global saturation.
Huawei announces H1 results
The latest financial results from Huawei are showing how smartphones are at once becoming a growth engine but also a drag on the telecoms giant. The company’s fast-growing smartphone business was one of the main engines behind a 40 percent surge in sales during the first half of this year, as Huawei consolidated its position as the world’s third largest brand behind only Samsung (Seoul: 005930) and Apple(Nasdaq: AAPL). But at the same time, fierce competition in the sector also sharply eroded Huawei’s profit margins. Read Full Post…
Bottom line: New data shows Huawei’s smartphone sales growth slowed sharply in the second quarter, and the company will be lucky to log 20 percent annual growth due to saturation in its home China market.
Huawei smartphone growth slows sharply in Q2
The first of many reports for second-quarter smartphone sales has just come out, revealing one of the first declines in more than a year for the surging Huawei. At the same time, the new data from TrendForce show that surging Chinese brands Oppo and Vivo are also seeing rapid slowdowns in their recent breakneck growth. The bigger picture is that the global smartphone market is slowing sharply or even contracting after years of rapid growth, with global leaders Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930) also suffering big drops this year. Read Full Post…
Bottom line: Huawei’s new lawsuits against Samsung in China and T-Mobile in the US are designed to show the company is now a major global player, and could also be preemptive to deflect attention from upcoming bad news.
Huawei files new suits against Samsung, T-Mobile
China’s latest smartphones superstar Huawei is suddenly getting quite aggressive in the courtroom, with word the company has filed new lawsuits against global leader Samsung (Seoul: 005930) and US wireless carrier T-Mobile (Nasdsaq: TMUS). Those reports are coming as new data show that Huawei boosted its position as China’s leading smartphone brand with 17.3 percent of the market in the second quarter. (English article) Huawei’s sales surge continues an ongoing trend, though the sudden courtroom aggression is relatively new for the company, which was more used to getting sued in the past than suing other companies over patent violations. Read Full Post…
The following press releases and news reports about China companies were carried on July 7. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Drops to Fifth in China’s Mobile Market as Locals Rise (English article)
Huawei Files US Patent Lawsuit Against T-Mobile (Nasdaq: TMUS) (Chinese article)
SAIC, Alibaba (NYSE: BABA) to Mark Chinese Foray Into Connected Cars With SUV (English article)
Canadian Solar (Nasdaq: CSIQ) Sells Solar Power Projects in China (PRNewswire)
China Resources Beer (HKEx: 291) Plans $1.2 Bln Rights Issue to Buy SABMiller’s JV Stake (English article)
Bottom line: Reports of big sales target reductions could point to a looming slowdown for Huawei, as it tries to move out of low-end smartphones and into an increasingly saturated higher end of the market.
Huawei set for slowdown?
After posting phenomenal growth over the last year to become the world’s third biggest smartphone brand, China’s Huawei may be seeing a slowdown that’s reportedly prompting it to sharply cut its sales targets for this year. If the reports are true, the downward revision would mark a sudden reversal for Huawei, which has been posting sales growth in the 50-60 percent range since the middle of last year when its recent surge began. Such a shift would hardly be unprecedented in the fast-changing smartphone world, though it would come as a slight surprise since the company’s phones have become quite popular here in China, approaching the status of global superstar Apple (Nasdaq: AAPL). Read Full Post…
Bottom line: A Beijing court’s finding that Apple’s iPhone 6 infringed on a small company’s designs looks flawed, and the judge should be commended for allowing sales to continue pending an appeal of the case.
Beijing court rules against Apple in product design case
Apple (Nasdaq: AAPL) is suffering what looks like yet another setback in China, with word that a Beijing court has found the iPhone maker guilty of stealing product designs from an obscure smartphone maker in south China. But a closer look at the reports shows that perhaps even the Beijing judge that made the ruling realizes how ridiculous the case is, and has allowed Apple to continue selling its iPhone 6 phones in China pending an appeal. Such an appeal is likely to take months or perhaps even a year, by which time iPhone 6 sales will probably be insignificant anyhow. Read Full Post…
The following press releases and news reports about China companies were carried on June 14. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Announces Lowered Revenue Guidance for Q2 (PRNewswire)
Nokia (Helsinki: NOK1V) Signs $1.5 Bln Framework Deal with China Mobile (HKEx: 941) (English article)
Okmetic (Helsinki: OKM1V) Says 93 Pct of Shares Tendered for Offer by China’s NSIG (GlobeNewswire)
After Apple,Didi Chuxing Gets $600 Mln Investment from China Life (HKEx: 2628)
Cheesecake Factory (Nasdaq: CAKE) Opens First China Store at Shanghai Disney (Businesswire)
The following press releases and news reports about China companies were carried on June 4-6. To view a full article or story, click on the link next to the headline.
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Accor Gains After Report That Jin Jiang (HKEx: 2006) Aims to Increase Stake (English article)
China’s HNA Group Eyes South American Airline Groups Avianca – Sources (English article)
SoftBank Proceeds From Alibaba (NYSE: BABA) Selldown Rise to $10 Bln (English article)
Huawei Aims to Pass Samsung, Apple in 5 Years to Become Top Smartphone Brand (Chinese article)
Indian Smartphone Maker Micromax Plans to Enter China Next Year (Chinese article)
