Tag Archives: OnePlus

SMARTPHONES: Is Apple’s Price Cutting Enough to Salvage China?

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Bottom line: Apple will continue discounting its iPhones in China to stop its sinking market share, which could slow but not halt its decline in the face of growing competition from the likes of Huawei.

Apple’s retail partners pare back China iPhone prices

Following a break of a month, I’m returning to my writer’s seat with discussion of the China outlook for tech giant Apple (Nasdaq: AAPL), which has turned to a very un-Apple-like strategy of discounting its products in the world’s largest smartphone market. China has been a fickle place for Apple, at one point accounting for nearly a quarter of the company’s global sales, as brand-conscious Chinese paid big premiums for trendy iPhones. That’s hardly the case now, with China accounting for just 15.6 percent of Apple’s total sales in its last quarterly report. Read Full Post…

SMARTPHONES: Smartisan Gets New Funding, But From Where?

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Bottom line: Smartisan’s new funding and plans to produce 5-6 smartphones a year look like an anomaly in the highly competitive market, and it’s unlikely to survive as a standalone entity over the next 5 years.

Smartisan gets new funding

I was a bit surprised to read that a clear second-tier smartphone player, the uppity Smartisan, has received 100 million yuan ($147 million) in new funding, as we begin the latest week of summer. I haven’t seen this company’s name or many second-tier players like OnePlus in more than half a year, though their collective names have come up quite a bit in the bigger smartphone numbers.

That’s a reference to the “other” category in the quarterly smartphone figures put out by data tracking firms like IDC, which show that this collective group that includes all names lumped together after the top 5 is rapidly losing share. In IDC’s latest China market data that came out last week, the top 5 vendors, Huawei, Oppo, Vivo, Xiaomi and Apple (Nasdaq: AAPL), collectively controlled 73 percent of the market. “Others”, including the likes of Smartisan, had to divvy up the remaining 26.9 percent. But what was most notably was that 26.9 percent marked a sharp decline from last year, when this group controlled 36.2 percent. Read Full Post…

SMARTPHONES: Coolpad in Denial on LeEco Takeover Talk

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Bottom line: Rumors that LeEco is in talks to take over Coolpad are probably true, with a deal likely in the next few months that would see the former buy a controlling stake or even purchase the latter outright.

Coolpad to be acquired by LeEco?

I don’t usually write about rumors, but I just couldn’t resist opining on new market talk saying that struggling smartphone maker Coolpad (HKEx: 2369) may become the first major player to get swallowed up in a looming industry shakeup. In this case Coolpad is denying the rumors, which say it will be acquired by online video superstar LeEco (Shenzhen: 300104), which is already a major stakeholder and now pays Coolpad to manufacture its recently launched line of smartphones. Read Full Post…

SMARTPHONES: Lenovo Brings Zuk Home, TCL China Sales Plunge

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Bottom line: Lenovo’s new emphasis on its year-old Zuk smartphone brand and TCL’s plunging sales reflect ongoing cutthroat competition in China, though neither company is likely to give up the domestic market anytime soon.

Lenovo launches new Zuk phone

New headlines surrounding 2 of China’s bigger stumbling smartphone makers reflect the market’s current state of chaos, as more than a dozen well-funded brands battle for surpremacy. Leading the headlines is PC titan Lenovo (HKEx: 992), which has decided to bring its young Zuk smartphone brand back into the parent company after initially letting it operate independently.

At the same time, faded giant TCL (HKEx: 2618) has just reported worrisome quarterly results that show its China smartphone sales plunged by more than half due to the market’s fierce competition. Both Lenovo and TCL are rapidly becoming victims in China’s bloody smartphone wars, though each is unlikely to withdraw from the market anytime soon due to strong backing from a cash-rich parent. Read Full Post…

SMARTPHONES: Dakele Becomes First Smartphone Victim

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Bottom line: The closure of small smartphone maker Dakele marks the latest distress signal from the sector, with one or more larger, more familiar brands likely to close shop within the next 6 months.

The inevitable has finally happened in China’s 2-year-old smartphone wars, with word that a smaller player named Dakele has officially closed shop after running out of money. It’s not completely true to call Dakele the first victim of China’s smartphone price wars, since we saw a steady stream of bankruptcies among component makers that supply the actual brands toward the end of last year.

But Dakele’s closure does mark a major milestone, since it’s the first case I’ve seen of a sizable brand going bankrupt and probably signals more closures in the year ahead. Some of the most likely candidates for such closure, or perhaps purchase by another larger player, include mid-size brands like OnePlus and Smartisan, which have failed to find an audience and are probably losing big money. Read Full Post…

SMARTPHONES: ZTE Joins Chorus of Smartphone Trouble Signals

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Bottom line: Beijing should note the latest trouble signal from ZTE in the smartphone sector, and take steps to prevent future similar boom-bust cycles by encouraging more responsible investing incentives by local governments.

ZTE cautious on China smartphone market
ZTE cautious on China smartphone market

The latest trouble signal from China’s overheated smartphone sector came last week from telecoms stalwart ZTE (HKEx: 763; Shenzhen: 000063), which said it would remain cautious in the world’s largest market even as it announced ambitious new sales targets for the rest of the world this year. The company’s relative caution in its own home market comes amid a looming shakeout that is just the latest in a series of boom-bust cycles that have become all too common in China’s business landscape in the last 3 decades.

While market forces play a large role in these bubbles, regional governments looking to spur economic growth may also share some responsibility by offering incentives that encourage local firms to enter unfamiliar areas where the chance of failure is high. Such failures often result in big financial losses and mass layoffs, negating any economic benefit they were supposed to create. Read Full Post…

SMARTPHONES: ZTE Ties With Suning, Eyes Big Growth

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Bottom line: ZTE’s new Suning tie-up presages an aggressive push into the China smartphone market this year, potentially helping it reach an aggressive target for 20 percent annual revenue growth over the next 5 years.

Suning buys into Nubia

Following a painful restructuring that wrapped up more than a year ago, telecoms stalwart ZTE (HKEx: 763; Shenzhen: 0000063) is heading into the New Year with a major new partnership with retailing giant Suning (Shenzhen: 000063), and a medium-term revenue target that looks quite aggressive. The signals reflect a new level of confidence at ZTE, which has returned to the profit column and is aggressively building up its smartphone business as a key plank for its future growth.

The smartphone business lies at the heart of the new tie up with Suning, which is buying a major stake in ZTE’s separately-run upscale Nubia brand. The bigger picture has a top ZTE official forecasting the company’s revenue will hit 200 billion yuan ($31 billion) by 2020, a 150 percent increase over 2014 levels. Read Full Post…

SMARTPHONES: OnePlus Layoffs, Smartisan’s Bankrupt Supplier

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Bottom line: OnePlus and Smartisan are 2 brands that could be most at risk for closure or acquisition in a looming smartphone shakeup that will intensify next year and claim at least 2-3 mid-sized and smaller players.

Less than 2 weeks after he talked about a looming shakeup in China’s overheated smartphone sector, OnePlus co-founder Carl Pei is having to explain layoffs at his company, and also fend off rumors of a takeover bid. At the same time, more signs of Pei’s predicted shakeup are coming from Smartisan, another newer smartphone play, whose manufacturing partner for its new model has reportedly gone bankrupt.

Both OnePlus and Smartisan fit the profile of the kind of company that Pei said would be most at risk in the coming shakeup. Each is relatively young, and both are pure smartphone plays without any other operating history. That means they have few other resources to fall back on as their profits evaporate in the unending price wars gripping China’s smartphone market. Read Full Post…

News Digest: December 22, 2015

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The following press releases and media reports about Chinese companies were carried on December 22. To view a full article or story, click on the link next to the headline.
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  • Alibaba (NYSE: BABA) Hires Ex-Apple Investigator for Global Anti-Piracy Fight (English article)
  • OnePlus Denies Merger Rumors with Oppo, Says Layoffs Part of Improvement Plan (Chinese article)
  • Suning (Shenzhen: 002024) Invests 523 Mln Yuan in Jiangsu Soccer Club (Chinese article)
  • SABMiller (London: SAB) China Partner Said to Pick Banks to Advise on Snow JV (English article)
  • LightInTheBox (NYSE: LITB) Reports Q3 Financial Results (PRNewswire)

SMARTPHONES: OnePlus Sees Shakeout Intensifying

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Bottom line: New comments from OnePlus are the latest sign of a shakeout set to hit China’s smartphone sector in 2016, with at least 3-4 small to mid-sized brands likely to close up shop by the end of next year.

OnePlus trims product line

The latest signs of trouble in the overheated smartphone space are coming from newcomer OnePlus, which is detailing its own missteps and predicting a much-needed industry shakeout will intensify soon. The comments from OnePlus co-founder Carl Pei are some of the most direct I’ve seen so far about the industry’s current woes, though he’s careful to avoid any implication that OnePlus itself might fall victim of the shakeout he’s predicting.

The fact of the matter is that OnePlus is exactly the kind of player that’s likely to go belly up in the looming shakedown, and Pei’s description of his current situation paints a rather bleak picture for his company. Equally intriguing is Pei’s prediction that one or more major players may also withdraw from the space in the coming consolidation. Read Full Post…

News Digest: December 11, 2015

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The following press releases and media reports about Chinese companies were carried on December 11. To view a full article or story, click on the link next to the headline.
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  • Fosun (HKEx: 636) Chairman, China’s Warren Buffett Guo Guangchang Goes Missing (Chinese article)
  • China’s Hippest Smartphone Maker OnePlus Warns Shakeout Will Get Worse (English article)
  • Yum (NYSE: YUM) Gives China Update, Reaffirms China Q4 Sales Guidance (Businesswire)
  • Chinese Hotpot Chain Haidilao Said to Consider $300 Mln IPO (English article)
  • Tongcheng to Enter Air Travel Space, Eyes A-Share Domestic Listing in 2016 (Chinese article)