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…
The following press releases and media reports about Chinese companies were carried on February 10. To view a full article or story, click on the link next to the headline.
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Qualcomm (Nasdaq: QCOM) Pays $975 Mln, Resolves China Antitrust Dispute (English article)
Alibaba (NYSE: BABA) Places China Smartphone Bet With $590 Mln Meizu Deal (English article)
Hisense (Shanghai: 600060), Tencent (HK: 700) In TV Game Platform Tie-Up (Chinese article)
Starwood to Sell NYC’s Baccarat Hotel To Chinese Insurer Sunshine (English article)
Sohu (Nasdaq: SOHU) Reports Q4 And Fiscal Year 2014 Unaudited Results (PRNewswire)
The following press releases and media reports about Chinese companies were carried on November 27. To view a full article or story, click on the link next to the headline.
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Wal-Mart (NYSE: WMT) Dismisses 30 China Executives In Restructuring (English article)
Shanda Interactive Sells Controlling Interest In Shanda Games (Nasdaq: GAME) (PRNewswire)
China Widens ‘Tax-Evasion’ Net Amid Microsoft (Nasdaq: MSFT) Case (English article)
Smartphone maker Xiaomi’s co-founder Lei Jun is a marketing master, but his lightweight status as a technology expert landed him in the middle of an embarrassing gaffe in the microblogging realm over the past week. I normally would sympathize with someone caught up in such a gaffe, as such mistakes are usually harmless even if they’re somewhat embarrassing. But in this case I don’t feel too much sympathy for Lei, who is such a tireless promoter for his company that this kind of stumble was almost inevitable.
Meantime, the number “2” seems to be a magic one for leading search engine Baidu (Nasdaq: BIDU), which made a rare appearance in the microblogging realm to trumpet the formal launch of its new search service in Brazil — its second major foray outside China after a dismal first effort in Japan. In this case, Baidu isn’t really trumpeting the “2” element of its Brazilian story, even though it took more than 2 years for the launch since reports first emerged of its plans for the site. Read Full Post…
I have a lot of respect for Tencent (HKEx: 700), China’s largest Internet company and now one of the world’s most valuable web firms based on the meteoric rise in its stock over the last few years. But that said, I’m starting to have some concerns about the company’s future due to its sudden move into many unfamiliar areas, including the latest which reportedly has it looking to buy a cellphone maker. In a somewhat ironic twist, Tencent’s cellular foray would come just a couple of months after Google (Nasdaq: GOOG), the world’s largest Internet company, admitted failure with its own cellphone adventure by selling its Motorola Mobility unit at a major loss.
