For the latest news on U.S.- and Hong Kong-traded Chinese stocks, visit our new Bamboo Works site.
Tag Archives: Motorola
Motorola in China latest Business & Financial news from Doug Young, the Expert on Chinese High Tech Market, (former Journalist and Chief editor at Reuters)
Bottom line: Lenovo’s plans to turn around its struggling smartphone business lack focus and are likely to fail, which could ultimately result in the exit of longtime chief Yang Yuanqing this year.
Lenovo denies plans to change Motorola logo
Computer giant Lenovo (HKEx: 992) was busy showcasing its latest PCs at a major trade show last week in Las Vegas, but industry watchers were far more interested in the outlook for its struggling smartphone business. That’s because 2016 could easily become a make-or-break year for Lenovo, which desperately needs to turn around a smartphone unit that will be critical to its future growth.
In response to a flurry of questions focused on its smartphones, talkative CEO Yang Yuanqing said his company is making steady progress in the BRICS markets of Brazil and India, and that he’s aiming to set Lenovo back on an upward track in its home China market. Lenovo also announced a vague new smartphone partnership with Google (Nasdaq: GOOG), and denied any plans to jettison its the famous bat-wing logo for its recently acquired Motorola brand.Read Full Post…
It’s official: the fast-rising Huawei has formally passed the 100 million mark for smartphone sales this year, cementing its place as the world’s undisputed third largest player behind only Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930). In a relatively unusual move for this low-profile company, Huawei is also trumpeting the milestone in a formal press release and forecasting more strong growth for next year.
Huawei has been China’s biggest success story to date in the young smartphone space, gaining rapid momentum over a crowded field of domestic rivals that includes Lenovo (HKEx: 992), ZTE (HKEx: 763; Shenzhen: 000063) and smaller names like Alibaba-backed Meizu. But the company should also carefully watch the case of the stumbling Xiaomi, which was being called a homegrown Chinese version of Apple before it began its recent rapid fall from grace. Read Full Post…
Bottom line: Lenovo’s latest results show a company on the cusp of prolonged downturn over the next 2-3 years, as efforts to resuscitate its ailing smartphone business look set to sputter.
Lenovo stands at a crossroads
When is a $714 million loss good news? It appears the answer is when your name is Lenovo(HKEx: 992), the world’s biggest PC maker, which has just thrilled investors by reporting the massive loss in its latest quarterly results. It seems investors were braced for even worse, expecting a loss of just over $800 million due to a previously announced $923 million one-time charge as it cleared out massive inventory of its low-end smartphones that have failed to find a market in China or overseas.
Of course I’m being slightly sarcastic in my assessment, since such a massive loss is never a good thing and Lenovo in this case simply wasn’t losing as money as quickly as many were expecting. But the better-than-expected result still sparked a rally for Lenovo’s shares in Hong Kong, with the stock finishing up nearly 6 percent after an earnings report that was quite uninspired otherwise. Read Full Post…
Bottom line: Lenovo’s focus on PCs for its latest product launch is designed to divert attention from its struggling smartphones, which are likely to show more losses and weak performance in the company’s upcoming quarterly results.
Lenovo targets bargain hunters
It was just 2 years ago that Chinese tech titan Lenovo (HKEx: 992) was on top of the world, having just gained the title as the world’s biggest PC brand from Hewlett-Packard (NYSE: HPQ) and declaring that Apple (Nasdaq: AAPL) and Samsung (Seoul: 005930) were its next targets. But you don’t hear the company’s chatty chief Yang Yuanqing talking about Apple, Samsung or even smartphones that much these days, most likely because all of its efforts in that space have struggled to find an audience.
Instead, Yang was falling back on his company’s older PC business in the latest headlines, showing off a few new models from its Yoga line that can function as both laptop and tablet PCs. The only problem is that both of these types of computer are in rapid decline, as consumers increasingly flock to large-screen smartphones for simple functions like reading news and e-commerce shopping that they used to do on their PCs. Read Full Post…
Bottom line: Lenovo’s plan to reorganize its mobile division around its struggling Motorola operations looks misguided, and doesn’t address why the company’s smartphones have become such industry laggards.
Lenovo reorganizes mobile unit around Motorola
Just a week after I called on PC giant Lenovo (HKEx: 992) to write off Motorola, the company is doing just the opposite and betting bit on the sinking US smartphone brand. That’s the latest word coming from reports that Lenovo is preparing a major overhaul for its struggling mobile operations, which are being reorganized with Lenovo’s recently acquired Motorola operations as the centerpiece.
All of this comes as Lenovo is rapidly emerging as the first major loser in the ongoing war for market share among China’s big smartphone makers. Lenovo reported dismal quarterly results a couple of weeks ago, including a miserable performance for smartphone operations that it hopes will someday replace fading PCs as its core business. Leading the poor results were a 31 percent drop in sales for its Motorola phone division, which Lenovo purchased last year from Google (Nasdaq: GOOG) for $2.9 billion. (previous post) Read Full Post…
Bottom line: Lenovo should write-off its Motorola investment as a failure, and focus its smartphone efforts on building up its own brand rather than relying on more acquired foreign names.
Lenovo in need of Motorola write-off
PC giant Lenovo (HKEx: 992) repeated a frequent pattern last year when it purchased a former global leader, Motorola, with plans to resuscitate the struggling brand to boost its own smartphone business. It repeated yet another pattern last week when it said that early efforts to revive Motorola were failing, undermining its own profits and sparking one of the worst sell-offs for its shares in recent memory.
Having learned once more the difficulties of reviving broken western brands, Lenovo should now take the bold step of considering a complete write-off of its $2.9 billion Motorola purchase, or at least relegating the brand to niche status. The setback also shows more broadly why Lenovo and other globally-minded Chinese companies need to abandon the strategy of buying struggling global brands at bargain prices, and instead should focus on developing their own names. Read Full Post…
Bottom line: Lenovo’s attempt to make Motorola the flagship for its smartphone business looks set to fizzle, in a major setback for the company’s drive into mobile devices.
Moto sales on downward slide
I’ve predicted gloom and doom before for PC giant Lenovo (HKEx: 992), China’s first truly global high-tech brand, and each time the company has proven me wrong. But Lenovo’s latest quarterly financial report really does look like cause for concern once more, showing results that can only be described as terrible. Anchoring the misery was a huge sales plunge for its recently acquired Motorola brand, which was meant to become a cornerstone for Lenovo’s emerging smartphone business.
In some ways this particular cycle looks like deja vu, since Lenovo followed a similar pattern when it burst onto the global stage a decade ago with its landmark purchase of IBM’s (NYSE: IBM) PC business. That acquisition also later created major headaches for Lenovo, and resulted in a massive restructuring that ultimately laid the groundwork for the company to become the world’s leading PC brand. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 14. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Lenovo (HKEx: 992) faces Motorola Hangover, Cuts 3,200 Jobs as Sales Slide (English article)
Xiaomi Announces New Products, Including MIUI 7 Operating System (Chinese article)
Amazon (Nasdaq: AMZN) China to Accelerate Local Investment – President (Chinese article)
Bottom line: The purchase of Micron by Tsinghua Unigroup offers a good chance for Sino-US confidence building if Washington signals it will fairly consider such a deal and Unigroup demonstrates its actions are commercially driven.
Micron sale offers chance to boost Sino-US trust
A potential mega-deal that would see China’s Tsinghua Unigroup buy leading US memory chip maker Micron Technology (Nasdaq: MU) could become a major trust-building exercise between China and Washington if handled properly, but could also quickly end in an angry war of words if the opposite occurs. Both sides need to take important steps to ensure fair trade in the case, which is sensitive because it involves the acquisition of a US high-tech leader by a company with close ties to China’s top science university.
For its part, Unigroup could take steps to show its independence from Tsinghua University, and more broadly to show that it is a commercially-focused business that doesn’t make decisions based on government orders or support. For its part, Washington could signal it is willing to consider a deal that appears to pose no threat to national security, even though it would see a major technology company taken over by a Chinese peer. Read Full Post…
Bottom line: US national security regulators are likely to approve the potential purchase of Micron by China’s Tsinghua Unigroup, to demonstrate their commitment to fair trade and avoid politicizing cross-border high-tech M&A.
Micron sale likely to get US approval
In the days after reports emerged that China’s Tsinghua Unigroup was planning a bid for US memory chip giant Micron (NYSE: MU), media have been buzzing with speculation over whether Washington might veto a deal on national security grounds. I can understand the logic from both views, and some say recent US allegations of frequent hacking attacks from China could add to arguments for a veto of the deal.
But as a longtime watcher of this kind of transaction, I expect that Washington will ultimately approve the purchase to demonstrate its commitment to fair trade. Such a move would also send a strong signal to Beijing, which is showing growing signs of limiting sales by foreign technology companies in China with its recent introduction of a sweeping new national security law. Read Full Post…
Bottom line: Xiaomi’s newest technology headache, if true, could delay the launch of its fifth-generation phone, further sapping its momentum and making it difficult to reach its 2015 sales target.
Xiaomi reportedly hits technology glitch
The once invincible Xiaomi is starting to look increasingly mortal, with reports that the smartphone high-flyer may have to delay the launch of its newest model due to technical reasons. I’m not too knowledgeable on the technical issues in this instance, but the potential new delays for the release of the Xiaomi 5 appear to be related to fingerprint recognition technology that the company plans to build into the new models.
If these latest reports are true, the delays could put a big crimp in the Xiaomi’s ambitious sales plans this year as it attempts to maintain its breakneck growth. Maintaining that kind of growth looks increasingly difficult due to all the technical issues, combined with intensifying competition in Xiaomi’s core China market. That competition is causing the company to abandon the online-only sales model that helps it keep costs down, which will ultimately undermine its profit margins. Read Full Post…
