Bottom line: The snowballing of a recent series of mudslinging remarks by major companies underscores the rampant lack of business ethics in China, and could prompt some much-needed public debate on the topic.
China business ethics in need of fixing
What started as a couple of stories highlighting the shady business practices that are all too common in China is starting to snowball, with home appliance giant Gree (Shenzhen: 000651) and a local start-up air purifier maker adding their voices to this entertaining year-end war of words. At the heart of this verbal mudslinging is a toxic Chinese business culture where practices like illegal copycatting, corporate espionage and violation of business contracts are quite common and even accepted to a certain degree. Read Full Post…
Bottom line: Qihoo’s new joint venture looks like a smart tie-up to promote its software and online services, while Xiaomi’s resumption of India sales looks like a hollow win in its patent battle with Ericsson.
Qihoo, Coolpad in JV
A trio of smartphone stories are in the news today, including updates on major news involving security software specialist Qihoo 360 (NYSE: QIHU) and the ultra-cool Xiaomi. The first headline has Qihoo moving into the overheated smartphone space through a major new joint venture with domestic giant Coolpad (HKEx: 2369). In the second headline, Xiaomi has been allowed to resume selling some of its smartphones in India, after a judge last week ordered it to stop sales amid an ongoing patent dispute with Swedish mobile technology giant Ericsson (Stockholm ERICb). Read Full Post…
A national anti-corruption campaign at major state-run firms has filled the headlines these last few months, but a spate of smaller scandals last week cast a spotlight on another lower-profile problem that is far too common in China’s private corporate sector. That problem is deficient business ethics, which created embarrassments twice for smartphone sensation Xiaomi, and also for social networking app developer Momo (Nasdaq: MOMO) and security software specialist NQ Mobile (NYSE: NQ). Read Full Post…
Bottom line: New copycat claims by a Japanese air purifier maker reflect the kinds of challenges Xiaomi will face as its profile rises, slowing down its global expansion and potentially undermining its cool image.
Xiaomi faces new coypcat allegations
The last couple of months have been a tough time for smartphone sensation Xiaomi, which is becoming a growing target of accusations that increasingly portray the company as China’s leading copycat. The latest such accusations are coming from a Japanese firm, which says its designs were ripped off for a new line of high-tech air purifiers that Xiaomi announced earlier this week. Those allegations come the same week that Xiaomi was penalized in India for illegally using patented technology from telecoms equipment giant Ericsson (Stockholm: ERICb), and 2 months after Xiaomi was slammed by a top Apple (Nasdaq: AAPL) executive for being China’s copycat supreme. Read Full Post…
Bottom line: Xiaomi is likely to quickly settle a patent dispute against it by Ericsson in India, which could slightly raise its costs but won’t affect its longer term development in the market.
India judge crimps Xiaomi’s global expansion
The global expansion plans of fast-rising Xiaomi may have hit a major roadblock, with word that a court has ordered the company to stop importing and selling its popular low-cost smartphones in India. Xiaomi had been targeting India as one of the main drivers in its campaign to become a major global smartphone brand, and has made a number of major moves in the market this year. But now it will have to deal with this new litigation, which is coming from global telecoms equipment giant Ericsson (Stockholm: ERICb) over patent infringement claims. Read Full Post…
Ripples from Hewlett-Packard’s (NYSE: HPQ) decision to break itself into 2 companies are being felt in China, with word that HP is looking for someone to buy a majority stake in its China-based router division. I can immediately think of 2 Chinese firms that would be interested in the stake, namely homegrown networking equipment giant Huawei and also leading PC maker Lenovo (HKEx: 992).
China’s second largest networking equipment maker ZTE (HKEx: 763; NYSE: 000063) could also be interested, even though it doesn’t have a past record for major acquisitions. There’s also the chance that one of Europe’s major networking equipment makers might be interested, with Ericsson (Stockholm: ERICb) or Nokia (Helsinki: NOK1V) as the most likely choices. Read Full Post…
After fraying under a steady stream of disputes over the last 2 years, China-Western trade relations took a much-needed turn for the better last week with new reports showing that Beijing and its major trading partners were taking constructive steps to reduce the tensions. Two reports indicated Beijing will take steps to reduce some of the government support it gives to emerging high-tech industries, addressing a sore spot in its trade relations with the west. Read Full Post…
Several significant telecoms stories are buzzing through the headlines as China returns to work after a long holiday, led by news that iPhone sales have gotten off to a roaring start after initially hitting a regulatory roadblock in the world’s largest mobile market. Also of interest is word that China and the European Union are close to settling a long-running dispute that could give European networking equipment makers better access to the lucrative Chinese market. And finally there’s a bit of regulatory news that looks like a positive sign, showing China is trying to cut its vast bureaucracy to provide easier market access for makers of telecoms products. Read Full Post…
After several false alarms, China’s slow-moving telecoms regulator has finally made its highly anticipated award of 4G licenses to the nation’s 2 smaller telcos, providing a much needed boost as they lose share to dominant telco China Mobile (HKEx: 941; NYSE: CHL). Now China Telcom (HKEx: 728; NYSE: CHA) and China Unicom (HKEx: 762; NYSE: CHA) will have to quickly build networks based on 4G FDD-LTE technology, the standard used in most of the rest of the world that will now finally make its debut in China. Read Full Post…
I was disappointed but certainly not surprised to read that homegrown telecoms equipment giants Huawei and ZTE (HKEx: 763; Shenzhen: 000063) won the big majority of a major new batch of contracts from dominant wireless carrier China Mobile (HKEx: 941; NYSE: CHL) to build its 4G network. Regular readers will know that I’m a strong advocate of free trade, and believe that Chinese and western equipment sellers should receive 4G contracts in any country roughly in line with their global market share. But in China such major purchasing often has a political element, especially when the buyer is a state-run company, which is clearly the case here. Read Full Post…
Media are buzzing about the newly released annual results from telecoms equipment giant Huawei, though everyone is taking a different angle on the latest figures. Some are focused on the company’s return to strong profit growth, while others are highlighting its aggressive plans for the next 5 years. But my favorites are the headlines that trumpet Huawei’s ascendance to become the world’s biggest telecoms equipment maker, since it officially passed Sweden’s Ericsson (Stockholm: ERICb) in revenue terms last year. Read Full Post…
