Bottom line: LeEco will try to buy out Coolpad later this year in its new position as the company’s largest stakeholder, while its plans for a massive Silicon Valley campus stand a less than 50 percent chance of getting completed.
LeEco boosts Coolpad stake
The phenomenal but problematic entertainment superstar LeEco (Shenzhen: 300104) is in a couple of big headlines as the new week begins, led by word that a new transaction has made it the largest stakeholder in struggling smartphone maker Coolpad (HKEx: 2369). Rumors were flying thick and fast last week that LeEco, formerly known as LeTV, was on the cusp of an outright takeover of Coolpad, and this latest move certainly looks like a possible prelude to such an bid. Meantime, separate media reports are confirming news from earlier this year saying LeEco has purchased a piece of prime Silicon Valley land that it hopes to develop as a campus for its future US headquarters.Read Full Post…
Bottom line: China’s sudden worries over Apple’s new love affair with India are probably overblown, but do reflect Apple’s need to find new growth engines to offset its rapidly cooling China sales.
China frets over Apple’s new dance with India
Apple(Nasdaq: AAPL) CEO Tim Cook’s surprise first trip to India 2 weeks ago may be firmly in the history books, but it’s still front page news in the Chinese headlines, revealing an unexpected angst in the world’s biggest smartphone market. China has grown accustomed to being at the center of Apple’s universe, as Cook has made numerous trips to the country over the last 3 years in a bid to curry favor with Beijing and Chinese consumers. So the sudden trip to India, a rival with China in many ways, appears to be causing some unexpected sweating by Chinese who worry they may soon lose their spot as the leading object of Apple’s affections. Read Full Post…
Bottom line: Xiaomi’s rapid slide in China is unlikely to ease soon and it’s likely to fall out of the top 5 brands before year end, while Huawei’s lawsuit against Samsung reflects a new confidence with its recent rapid rise.
Xiaomi rapidly losing steam in China
New headlines are shining a spotlight on 2 of China’s best-known domestic smartphone brands, even though the fast-rising Huawei and rapidly sinking Xiaomi are moving in opposite directions. New data shows just how badly Xiaomi has slipped over the last year at home, where the former market leader is now in danger of dropping out of the top 5 following a huge decline in first quarter sales. Meantime, the same data show a continued surge for Huawei, which is showing its growing confidence by a filing a new patent lawsuit against global smartphone leader Samsung (Seoul: 005930). Read Full Post…
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…
Bottom line: The 5 percent drop in China smartphone sales during the first quarter reflects the market’s current state of saturation, which will lead to more bankruptcies this year for suppliers and second-tier brands.
Xiaomi slips to third in China smartphone market
New data from China are shining a spotlight on the sudden slipping of global giant Apple (Nasdaq: AAPL) in the world’s largest smartphone market, as well as the slower decline of homegrown challenger Xiaomi. At the same time, the 5 percent decline in first-quarter shipments in the huge but intensely competitive China market bodes poorly for everyone. That includes a growing number of suppliers to the big brands like contract manufacturing giant FIH Mobile (HKEx: 2038), which has just warned that its profits are coming under intense pressure.
Much has been written about the effects that intense competition are having on Chinese smartphone brands, many of which are either barely profitable or are even losing money. But the toll has been even bigger on many of their suppliers like FIH, which makes phones for the likes of Xioami and Sony (Tokyo: 6758) and are coming under even bigger pressure due to slowing orders and cries from their customers for lower prices. Read Full Post…
The following press releases and news reports about China companies were carried on May 11. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Bottom line: Apple’s sudden loss of China market share to domestic rivals Huawei, Oppo and Vivo is a wake-up call that the tech giant needs to find new cutting-edge product areas to replace rapidly commoditizing smartphones.
Apple under pressure from China brands
The latest message for Apple (Nasdaq: AAPL) is coming in loud and clear from China, saying the company needs to find the next big thing if it wants to retain its crown as a global high-tech leader. That message has been playing out from numerous sources throughout this week, starting with Apple’s own latest financial results that showed its sales plummeted in China in the first quarter of this year.
That report was quickly followed by a flurry of new data from various research houses, all showing that Apple was rapidly losing China market share to homegrown up-and-comers like Huawei, as well as a recently rising duo of Oppo and Vivo. Adding insult to the injury was the disclosure by billionaire investor Carl Icahn that he recently dumped his Apple shares over concerns about the company’s eroding position in China. Read Full Post…
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…
Bottom line: ZTE’s change of leaders is a much-needed move to revive the company’s fortunes, though the choice of its former technology chief as new chairman looks a bit conservative.
ZTE gets new chairman
Following a turbulent period that saw it nearly lose access to many of its key suppliers, telecoms giant ZTE (HKEx: 763; Shenzhen: 000063) has just announced the arrival of a new chief, as it seeks fresh starts in its 2 main businesses selling networking equipment and smartphones. Many are pointing to ZTE’s recent run-in with Washington for illegally selling products to Iran as the direct reason for the departure of Shi Lirong, who was chairman for the last 6 years.
Perhaps that’s partly true, but the reality is that Shi’s tenure at the helm of ZTE has been marked by a much longer series of stumbles that has cost the company millions of dollars in sales and market value. Those missteps led ZTE to launch a major overhaul a couple of years ago that seemed to be showing results for its older networking equipment business. But more recently ZTE’s newer smartphone business has been showing signs of stumbling, and the latest Iran controversy may have driven the board’s decision to replace Shi. Read Full Post…
Bottom line: Coolpad’s sliding revenue and profits last year reflect intense competition in China’s smartphone market, and the company could become one of the first major victims of an upcoming shake-out for the sector.
Coolpad logs tough year in 2015
Fading smartphone maker Coolpad (HKEx: 2369) has just released financial results that show just how bloody China’s market was last year, with operating profits and revenue both tumbling by nearly half. The outlook certainly doesn’t look too promising for Coolpad, which was once an up-and-comer in the market but more recently has been overwhelmed by the non-stop competition. It also didn’t help that Coolpad lost an important backer last year, following a high-profile dispute with joint venture partner Qihoo 360 (NYSE: QIHU).
The year 2015 wasn’t a pretty one for Coolpad. The company benefited from its relatively early arrival to China’s smartphone market to become a leading local player, but by the end of last year had fallen out of the nation’s top 5 brands. It tried to bolster its position by signing up strategic partners that could ensure its future. But that plan backfired when one of those partners, Qihoo, became enraged after Coolpad formed another separate alliance with online video giant LeEco (Shenzhen: 300104), formerly known as LeTV. Read Full Post…
Bottom line: Lenovo’s latest overhaul looks promising by combining its older PC unit with its smartphones under a capable leader, but its longtime CEO could still get forced out if the plan doesn’t show signs of success in the next 6 months.
Lenovo in new corporate overhaul
A series of new stories are highlighting the growing rivalry between fast-rising gadget maker Huawei and the older Lenovo (HKEx: 992), which has just launched a major overhaul as it tries to right its fast-sinking ship. The overhaul looks like a last-ditch effort by longtime CEO Yang Yuanqing to save both his company and his own job, following a series of missteps over the last year in the critical smartphone space.
Meantime, other reports are showing how Lenovo is also trying to maintain its globally-leading position in the PC arena with the recent launch of a new series of models from its core ThinkPad series. That launch comes as Huawei gets set to roll out its first-ever rival notebooks. Lenovo actually unveiled its new ThinkPad X1 series back in January, though the actual products are just now beginning to find their way into the market. Read Full Post…
