Tag Archives: Smartisan

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…

China News Digest: October 15-17, 2016

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The following press releases and news reports about China companies were carried on October 15-17. To view a full article or story, click on the link next to the headline.
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  • ChemChina, Sinochem in Talks on Possible $100 Bln Merger: Sources (English article)
  • Tencent (HKEx: 700) to Sign $3.5 Bln Loan to Finance Supercell Purchase (Chinese article)
  • Weibo (Nasdaq: WB) Has Nearly Eclipsed Twitter (NYSE: TWTR) by Market Value (English article)
  • Smartisan Denies Rumors to be Aquired by NetEase (Nasdaq: NTES) (Chinese article)
  • Tongcheng Eyes IPO in 3 Years After Merger with Wanda Travel (Chinese article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)

SMARTPHONES: Smartisan Value Dives, LeEco Sales Sputter

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Bottom line: Smartisan’s plummeting value and big losses point to a possible sale or closure of the company by year-end, while LeEco’s weak smartphone sales reflect the market’s overheated condition.

Smartisan value gets hammered

Separate stories from 2 of China’s decidedly second-tier smartphone brands highlight ongoing stress in the overheated sector, even though a major casualty has yet to emerge. But that could change soon, with word that the asset value of high-brow brand Smartisan has plummeted over the last year, as disclosed in a new filing by one of its investors. Meantime, online video superstar LeEco (Shenzhen: 300104) has disclosed sales figures that look quite weak for its own smartphone business, which it launched more than a year ago with big hopes.

I’ve previously predicted we would see one or two major casualties from China’s crowded smartphone sector this year, though we have yet to see any big names close or get purchased. But there are still 3 months left in 2016, so perhaps we’ll see one or two mid-tier players finally decide to call it quits. Read Full Post…

China News Digest: September 22, 2016

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The following press releases and news reports about China companies were carried on September 22. To view a full article or story, click on the link next to the headline.
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  • Alibaba Takes Lead in China Digital Ad Market, Baidu Drops to Second (press release)
  • Postal Savings Bank of China IPO Raises $7.4 Bln After Pricing at Low End (English article)
  • China Telecom (HKEx: 728) to Close Accounts Without Real Name Registration (Chinese article)
  • Sony (Tokyo: 6758) Close to Motion Picture Alliance With China’s Wanda (English article)
  • Filing Shows Smartisan Value Drops By 500 Mln Yuan in Half Year (Chinese article)

SMARTPHONES: Smartisan Sale Rumors Point to Face-Saving Exit for Luo

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Bottom line: Rumors of a LeEco purchase of Smartisan are probably true as the company seeks a wealthy backer to continue funding its operations, and a deal could be announced in the next 2 months.

Smartisan in rumored sale talks to LeEco

Rumors surrounding a possible sale of the uppity Smartisan smartphone brand are rippling through the headlines today, providing some lively entertainment in the overheated sector. This particular story is drawing attention mostly due to Smartisan’s founder, the slightly pretentious Luo Yonghao, who was trying to parlay his success as China’s best-known English teacher into a smartphone brand. But Luo’s plan hasn’t materialized quite the way he imagined, and Smartisan is often rumored to be doing quite poorly and losing big money. Read Full Post…

China News Digest: August 18, 2016

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The following press releases and news reports about China companies were carried on August 18. To view a full article or story, click on the link next to the headline.
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  • Baidu (Nasdaq: BIDU), Ford (NYSE: F) Invest $150 Mln in Radar Tech Firm Velodyne (Chinese article)
  • Tencent (HKEx: 700) Announces Q2 Results (HKEx announcement)
  • Smartisan Chief Denies Rumors of Company Sale to LeEco (Shenzhen: 300104) (Chinese article)
  • WeChat Wallet, Alipay Enter Japanese Shopping Malls (Chinese article)
  • Apple (Nasdaq: AAPL) Announces Environmental Progress in China (Businesswire)
  • Latest calendar for Q2 earnings reports (Earnings calendar)

SMARTPHONES: More Distress Signals from Huawei, Smartisan

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Bottom line: Huawei’s aggressive H2 targets for its Honor sub-brand hint that sales for its core Huawei smartphones may be stumbling, while rumors of a wave of executive departures at Smartisan also hint at dire financial conditions at the company.

Huawei calls on Honor to boost smartphone sales

New distress signals are coming from China’s overheated smartphone sector in the form of headlines involving leader Huawei and smaller niche player Smartisan. Before I detail the headlines, I should note that some may disagree with my interpretation, since neither news item directly confirms any trouble. But that said, nobody ever wants to admit to bad news, and in both cases the headlines appear to confirm earlier signs of stress at each company. Read Full Post…

SMARTPHONES: Sinking Smartisan Raises Cash, Xiaomi Defers IPO

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Bottom line: Smartisan is likely to close or get sold by the end of this year, possibly to Meizu, while Xiaomi’s valuation is likely to fall by up to half when it returns to private investors for new funding with a year.

No near-term IPO for Xiaomi

A couple of fund-raising stories involving smartphone makers Smartisan and Xiaomi are in the headlines, reflecting in different ways the intense pressure each is feeling due to stiff competition that could soon claim a major victim. One headline has everyone buzzing over a recent share sale to raise cash by the founder of Smartisan, a highbrow niche brand set up by China’s most famous English teacher Luo Yonghao. The other has Xiaomi chief Lei Jun saying that his company may make an IPO in 2025, in what looks like a sarcastic response to a reporter’s question. 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…