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…
The following press releases and media reports about Chinese companies were carried on December 26-28. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Invests $1.25 Bln in Ele.me, Becomes Largest Stakeholder (Chinese article)
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…
The following press releases and media reports about Chinese companies were carried on March 13. To view a full article or story, click on the link next to the headline.
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Online Ratings and Group Buy Site Dianping Wins $850 Mln Series E – Sources (English article)
Tencent (HKEx: 700) Opens TMall Digital Store, Still Inaccessible On WeChat (Chinese article)
ReneSola (NYSE: SOL) Looks To Exit EU Solar Settlement Agreement (Chinese article)
Smartisan Enters Low-End Smartphones With 1,000 Yuan Model – Source (Chinese article)
Homeinns (Nasdaq: HMIN) Reports Q4 And Full Year 2014 Financial Results (PRNewswire)
Bottom line: China’s smartphone market is likely to contract another 10 percent this year, forcing some newer domestic manufacturers out of business, while Huawei’s bid to go upscale in the space is likely to face difficulty.
Huawei posts strong growth on smartphones
New data on China’s booming smartphone sector show the industry crossed a tipping point in 2014, with sales starting to sag after several years of explosive growth. That earlier growth was fueled by companies like Huawei, one of the nation’s largest manufacturers, which has just given some preliminary financial data for 2014. Huawei cited a big jump in smartphone sales as a major factor behind its 20 percent jump in total revenue last year, as strong gains for its consumer products division offset slower growth in its older telecoms networking equipment unit. Read Full Post…
Chatter in the microblogging realm this past week was squarely focused on the Double Eleven shopping binge that saw e-commerce sites and smartphone makers log impressive sales on the date also known as Singles Day. But not everyone was boasting about huge sales, as executives from early e-commerce leader Dangdang (NYSE: DANG) and smartphone aspirant Smartisan were both uncharacteristically quiet on their microblogs, hinting at mediocre results on the shopping holiday.
The situation was just the opposite at e-commerce leader Alibaba (NYSE: BABA), which single-handedly commercialized a day that now generates more sales than even Black Friday or Cyber Monday in the US. That rapid success in such a short time was putting a strain on Alibaba’s Alipay electronic payments arm, which reportedly was restricted to processing payments from Alibaba’s own e-commerce sites. That meant other companies’ sites often couldn’t accept Alipay for payments on their sites during the day.
Bottom line: Sony’s stalling fortunes in China’s smartphone market are the prelude to its eventual pullout, while Lenovo’s high-end push with the Motorola brand is likely to fall flat.
Sony smartphones in China setback
The latest news bits from the overheated Chinese cellphone market show an increasingly grim battle that’s claiming a growing number of victims at the lower and even middle ends. The latest bad news comes from struggling Japanese giant Sony (Tokyo: 6753), which has announced a significant pullback in the market as part of a broader global retrenchment. That could bode poorly for the equally struggling mid-range Motorola, as media report the brand will also target the mid- to upper-range of the Chinese smartphone market under its new ownership by PC giant Lenovo (HKEx: 992). Read Full Post…
China’s bloody smartphone price wars could soon claim their first victim, with word of massive price cuts from Smartisan, a highbrow brand that launched earlier this year with backing from a well-known personality. Despite its relatively late arrival to the crowded space, Smartisan has gotten surprisingly strong media attention since its launch in May, though not all of it has been positive.
One of the company’s main backers is Luo Yonghao, whose name is well known to many young Chinese professionals due to his popular series of English language instructional tapes. Just months after its launch, Smartisan made news after admitting it was experiencing production problems due to capacity bottlenecks. Last month the company also made a minor splash when Luo got in a high-profile online spat with an influential gadget critic who wasn’t impressed by Smartisan’s models.
The following press releases and media reports about Chinese companies were carried on October 28. To view a full article or story, click on the link next to the headline.
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Smartisan Cuts Prices By 1,000 Yuan, Smartphones To Start At 1,980 Yuan (Chinese article)
China Telecom (HKEx: 728) 4G Coverage To Reach 100 Cities By Next Year (Chinese article)
ZTE (HKEx: 763) Mobile Devices Q3 2014 Revenue Up by 40 Pct Year-on-Year (Businesswire)
Mobile SNS App ‘Blink’ Completes $20 Mln Series A Funding (English article)
Youku (NYSE: YOKU) Looks To US For Videos To Stream To Chinese Users (English article)
Several news bits are casting a spotlight on growing stress in the low-end smartphone market, where a crowded field of Chinese companies have been engaged in a cut-throat series of price wars for the past year. Leading the headlines is word that Coolpad, a leading homegrown brand, is cutting 10 percent of its workforce as it explores a new joint venture with some of its distributors. At the same time, other reports say that China Mobile (HKEx: 941; NYSE: CHL) won’t be coming to the rescue of these struggling companies by selling their smartphones to its subscribers at subsidized prices, as the leading Chinese carrier embarks on its own cost-cutting campaign to bolster its sagging profits. Read Full Post…
It’s rare that one issue dominates the blogosphere among the many tech executives who like to tweet about their companies on their microblog accounts. But the past week saw one such debate occur around a spat between 2 old friends in the smartphone space. In one corner was Luo Yonghao, a well-known English teacher who has recently moved into the highly competitive smartphone space. In the other was Wang Ziru, a self-styled gadget critic who has become quite influential. As many might guess, the debate centered on a recent critical review by Wang for Luo’s newly launched smartphone model under his Smartisan brand.
While the Luo-Wang spat kept the blogosphere well supplied with musings from a wide range of tech executives, a few other tidbits also provided some intriguing hints of things to come at other leading tech names. A couple of posts from Qihoo 360 (NYSE: QIHU) CEO Zhou Hongyi suggested that a major restructuring could be on the way; and separate musings from an executive at e-commerce giant JD.com (Nasdaq: JD) also hinted at potential similar moves. Read Full Post…
