Asustek Archives ~ Business China : news for investors in China

CELLPHONES: Google Eyes Nexus Tie-Up with Huawei

By newsdoug on June 19, 2015

Bottom line: Google is likely to soon announce that Huawei will make its next generation of Nexus smartphones, in an alliance that looks savvy for both companies for political and practical reasons.

Google, Huawei preparing Nexus partnership?

Global search giant Google (Nasdaq: GOOG) is continuing its low-key drive back to China, with word the next model from its Nexus line of smartphones will be produced by fast-rising domestic brand Huawei. The move is unconfirmed and sourcing in the reports comes from an unnamed Huawei employee.

But such a move would certainly be consistent with Google’s other recent actions, which have seen it moving quietly behind the scenes for a more active role in China’s smartphone market, the world’s largest. Despite its lack of formal presence, Google already enjoys a huge passive role in the market due to the huge popularity of its Android operating system, which is used by nearly all of China’s homegrown smartphone makers. Read Full Post…

Forbes Embraces, Keeps Distance From China With Sale

By newsdoug on July 21, 2014

Fosun fails in bid for Forbes

More than half a year after putting itself up for sale, US publishing giant Forbes Media has found a suitor in a group with strong China ties even though none of its members are actually Chinese. The announcement comes as a slight surprise because Fosun International (HKEx: 656), one of China’s biggest private equity firms, had been rumored as a frontrunner in the bidding for the US publishing giant. Some media are saying that price was the determining factor in the end, as Fosun may have been unwilling to pay the high premium that Forbes wanted. But the stigma of potential ownership by a Chinese company may have also influenced the final decision by Forbes, which wants to maintain its independent image while also staying active in the China market. Read Full Post…

News Digest: June 20, 2013

By newsdoug on June 20, 2013

The following press releases and media reports about Chinese companies were carried on June 20. To view a full article or story, click on the link next to the headline.
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China’s Wanda To Spend $1.6 Bln On UK Yacht Maker, Hotel (English article)
GM (NYSE: GM) Aims For 10 Pct Of China’s Luxury Car Market By 2020 (English article)
Shuanghui Getting $7.9 Bln Financing for Smithfield (NYSE: SFD) Bid (English article)
Microsoft (Nasdaq: MSFT) Introduces “Bing It On” Campaign to China (English article)
Asustek (Taipei: 2357) Stops Supplying PCs To Jingdong Over Low Pricing (Chinese article)

Lenovo’s TV Gamble: Failure Ahead? 联想电视赌注：未来会失败吗？

By newsdoug on May 15, 2012

Lenovo's first smart TV set to flop I should credit leading PC maker Lenovo (HKEx: 992) for being ahead of the curve by releasing its new smart TV in China last week, getting a slight lead on a widely anticipated launch for by Apple (Nasdaq: AAPL) for a similar new product group that could revolutionize the way people watch TV. (English article) Reviews are still few for Lenovo’s new product, a 55-inch TV called the K91; but based on its past track record as a company with limited capability in new product design, I would offer only a very small chance for this product to succeed, potentially costing Lenovo hundreds of millions of dollars in development and marketing costs. The reason for my pessimism is simple: Lenovo, a specialist in PCs for developing markets, has never shown any ability to be a leader in new product design, especially in areas where it has little or no experience. Its previous forays into cellphones, gaming consoles and tablet PCs have all been mostly flops, failing to generate any buzz or excitement after having to compete with better designed products from the likes of more innovative firms like Apple, Samsung (Seoul: 005930), Asustek (Taipei: 2357) and HTC (HKEx: 2498). Given that poor track record, I have little reason to believe this latest initiative will succeed either, especially since such smart TVs are a completely new category and thus there are few products out there to use as a guidebook into what works and what doesn’t for this area. I do at least have to give Lenovo credit for trying hard by buying state-of-the art technology for its first smart TV, with components coming from such top-end suppliers as chip designer Qualcomm (Nasdaq: QCOM), audio technology firm DTS (Nasdaq: DTSI) and its operating system based on Google’s (Nasdaq: GOOG) popular Android platform. The company may also be making a smart choice by launching the product in its home China market, where it is the dominant PC brand and which accounts for around half of its sales. But its early launch even in China could mean very little if its product doesn’t contain content and functionality that ordinary consumers want. What’s more, competing products from Samsung and especially Apple are likely to hit the market in a matter of months, meaning Lenovo won’t have much of a head-start over these rivals whose products will no doubt contain more features and generate more buzz than the Lenovo TVs. Lenovo hasn’t said very much about response for the product in the week since its launch, saying only that performance has exceeded its expectations. (Chinese article) But considering its past track record, look for the K91 to post disappointing sales over the longer term, perhaps in the tens of thousands this year, and for this broader smart TV initiative to end up as a failure for Lenovo like many of its other new product initiatives.

Bottom line: Lenovo’s new smart TV initiative is likely to fail despite an early head-start over rivals in China, with products from foreign rivals likely to eventually dominate the market.

HP: Abandoning China PC Market? 惠普能否继续在中国PC市场走下去？

By newsdoug on February 15, 2012

HP becoming bit player in China New data is showing that Hewlett-Packard’s (NYSE: HPQ) share of China’s PC market continued to plummet at the end of last year, a worrisome development for a company that is at once the world’s biggest computer brand but also seems unable to decide on its future direction in a PC market that will soon overtake the US to become the world’s largest. According to the latest data from IDC, HP’s share of the China PC market tumbled to 5.3 percent in the fourth quarter of last year, down from 8.5 percent in the second quarter, which was down from double-digits not long before when the company was one of China’s top players. (English article) The steep drop means that HP is just barely a top-5 player in China, with the latest data placing it behind market leader Lenovo (HKEx: 992), followed by Taiwan’s Acer (Taipei: 2353), US rival Dell (NYSE: DELL) and up-and-comer Taiwan’s Asustek (Taipei: 2357). HP’s rapid decline is due in no small part to confusion at the company’s headquarters over its future direction, following the departure of its widely respected CEO Mark Hurd in 2010 amid a scandal involving personal matters. Since then the company has announced plans to sell its core PC business last year, only to change its mind months later and force out the new CEO who made the decision. Such turbulence in the company’s top ranks is clearly not good for its longer term prospects, and its rapid fall in China is clearly an alarming sign as the country, already the world’s second largest PC market, prepares to overtake the US in the next few years to become the world’s biggest. Of course, many will argue that PCs could soon become an obsolete product anyhow, and that it’s more important to focus on next-generation products like smartphones and tablet PCs, which are more mobile and can perform many functions of PCs. But HP looks weak even in these 2 categories, and it’s probably fair to say its limited line of smartphones and tablet PCs are virtually unknowns in China. It’s probably too early to say HP is destined to become a non-player in China, as the company may finally be entering a new period of stability after the turbulence of the last 2 years. But unless it changes its game plan soon, it faces the very real risk of becoming a non-player in China, and ultimately losing its spot as the top global PC brand to the more focused Lenovo.

Bottom line: HP’s rapid fall in the China market reflects a broader turbulence at the company, which could result in its removal from the market if it doesn’t sharpen its focus soon.