Bottom line: A new Pepsi-branded smartphone set to launch in China next week could get an initial boost from strong publicity, but will quickly fizzle due to lack of special features to distinguish it from others in the crowded market.
Pepsi phone coming to China
An entertaining new twist to China’s overheated smartphone story is coming from the soft drink sector, with word that global beverage giant Pepsi (NYSE: PEP) is preparing to enter a crowded space that hardly needs any new entrants. The headline looked somewhat strange to me, though nothing surprises me these days in a market where names like industrial equipment supplier Sany (Shanghai: 600031) and air conditioner maker Gree (Shenzhen: 000651) have all jumped on the smartphone bandwagon.
Such a bandwagon approach is quite typical for China, where local companies are always quick to join the latest trends even if they have little or no experience in the business. But foreign names are usually a little more savvy, and this particular instance was the first I could recall of a major foreign brand joining this kind of silly herd mentality that often ends in failure and big losses for the associated company. Read Full Post…
Bottom line: Xiaomi will lower its profile after a recent spate of negative publicity and intensifying competition, but could still stand a 50-50 chance of becoming a major smartphone brand if it executes well in its globalization strategy.
Xiaomi in new switcharoo scandal
Former smartphone high-flyer Xiaomi is quickly learning that a high profile is a double-edged sword, with word that it’s landed in the middle of a fresh new false advertising scandal. Xiaomi certainly isn’t the only company learning this lesson, as its recent downfall tracks a much louder crash at former e-commerce high-flyer Alibaba (NYSE: BABA).
No one is predicting Xiaomi’s demise just yet, and I’ve often said that co-founder Lei Jun is largely to blame for the recent fall due to the huge expectations he set for his company. But this latest news involving false claims for one of the newest models from Xiaomi’s low-end Redmi smartphone line will certainly bring the company down yet another notch in the eyes of investors and consumers. Read Full Post…
Bottom line: Qihoo’s settlement of its dispute with Coolpad could ultimately see the former buy out their joint venture, leaving the latter open to a takeover by LeTV.
Qihoo, Coolpad settle JV dispute
Security software specialist Qihoo 360 (NYSE: QIHU) and smartphone maker Coolpad (HKEx: 2369) have announced a settlement in the spat over their troubled joint venture, though this hardly looks like the end of an entertaining story that has captivated China’s high-tech world for the last few months. This kind of settlement seemed likely, after Qihoo tried to forcibly sell its stake in the joint venture to Coolpad over claims that the latter had violated an anti-compete clause in their agreement.
Qihoo and Coolpad formed their joint venture last year, and Qihoo made its complaint after Coolpad later formed another smartphone manufacturing partnership with online video company LeTV (Shenzhen: 300104) in June. Now Qihoo says it has settled its dispute by agreeing to boost its stake in the Coolpad joint venture to 75 percent, giving it clear control of the enterprise. Read Full Post…
Bottom line: Qihoo and Meizu are likely to struggle with their new smartphone campaigns in India, where intensifying competition will also undermine domestic rivals like Xiaomi and Huawei that have recently entered the market.
Qihoo unveils new Qiku smartphones
Qihoo (NYSE: QIHU) and Meizu have announced they are taking their smartphones to India, becoming the latest Chinese brands to export to the fast-growing but increasingly competitive market. India is actually the second stop on Qihoo’s smartphone roadmap, which will begin in its home China market with the launch of the first 2 models of its new Qiku smartphone brand. Meizu has become a major second-tier player in its home China market over the last few years, and formally announced its own move into India this week as it looks to move overseas.
The pair will join several of China’s top smartphone makers in the increasingly crowded India market, which shares many qualities with China. Xiaomi launched in India last year and the market quickly became its second largest globally, while Huawei’s Honor brand has also scored rapid progress in the market. But Qihoo’s biggest competitor in India could be Coolpad (HKEx: 2369), which is already a big player in the market but will also produce Qihoo’s new smartphones through a joint venture formed by the pair last year. Read Full Post…
Bottom line: Second-quarter smartphone data confirms recent trends that have shown a surge for Huawei and Apple, while Lenovo and Samsung struggle and Xiaomi also faces rapidly slowing growth.
Huawei consolidates spot as world’s No 3 smartphone maker
The latest smartphone sales figures are out, showing a recent surge for Huawei and strong but slowing growth for Xiaomi, as Chinese brands continued to take 3 of the top 5 global spots. Meantime, the same chart shows the lackluster Lenovo (HKEx: 992) continued to stumble as it failed to find an audience for its products, and global leader Samsung (Seoul: 005930) also continues to struggle.
The latest second-quarter figures from IDC come as another smaller data tracking firm IHS Technology released its own numbers showing Xiaomi continued to rule the China roost and even boosted its share of the market. Meantime, Samsung continued to slip in the world’s biggest smartphone market, falling a notch to barely stay in the top 5 brands. Read Full Post…
Bottom line: Huawei’s accelerating smartphone sales reflect its growing momentum in China, and could prompt it to consider spinning off the unit for a potential IPO in its drive to become more transparent.
Huawei News
Smartphones power Huawei resurgence
Growing momentum for its smartphone business has become the driving force behind a resurgent Huawei, which has just reported solid first-half revenue growth that is showing signs of accelerating after a recent slowdown. That’s good news for Huawei, but less promising for domestic rivals like Lenovo (HKEx: 992), Xiaomi and Coolpad (HKEx: 2369), which are struggling for direction in a crowded Chinese smartphone market where global giant Apple (Nasdaq: AAPL) has also shown signs of a recent resurgence.
Huawei hasn’t been too generous in providing financial data for the first half of the year, saying only that revenue jumped by 30 percent to 176 billion yuan ($28 billion). (company announcement; Chinese article) For anyone who tracks the global market, that figure is already more than double the $12.5 billion in first half sales reported by Ericsson (Stockholm: ERICb), Huawei’s leading rival in its traditional networking equipment core area. Read Full Post…
Bottom line: Google is likely to soon announce that Huawei will make its next generation of Nexus smartphones, in an alliance that looks savvy for both companies for political and practical reasons.
Google, Huawei preparing Nexus partnership?
Global search giant Google (Nasdaq: GOOG) is continuing its low-key drive back to China, with word the next model from its Nexus line of smartphones will be produced by fast-rising domestic brand Huawei. The move is unconfirmed and sourcing in the reports comes from an unnamed Huawei employee.
But such a move would certainly be consistent with Google’s other recent actions, which have seen it moving quietly behind the scenes for a more active role in China’s smartphone market, the world’s largest. Despite its lack of formal presence, Google already enjoys a huge passive role in the market due to the huge popularity of its Android operating system, which is used by nearly all of China’s homegrown smartphone makers. 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…
Bottom line: Google could open a Chinese version of its app store by the end of this year and spend aggressively to quickly gain market share, but would face negative backlash from western critics for its U-turn back into the sensitive market.
Google lobbies China smartphone makers to include Play Store
Global Internet giant Google (Nasdaq: GOOG) is reportedly eying a return to China, with plans to launch a Chinese version of its flagship Google Play app store. The move, if true, would mark a major flip-flop for Google, which withdrew its core search engine from China in 2010 after a high-profile spat over Beijing’s strict censorship policies. But as many similarly principled companies quickly discover, China is a market that is simply too big to ignore.
That quandary led top business networking site LinkedIn (NYSE: LNKD) to enter China last year, despite expressing its own reservations about censorship, and top social networking (SNS) site Facebook (Nasdaq: FB) is also lobbying strongly for such a move. Google’s latest campaign comes in a the slightly less sensitive area of app store operation, though even that business would involve some self-censorship to eliminate apps that Beijing might consider sensitive for political or other reasons. Read Full Post…
Bottom line: LeTV’s impressive first fund-raising for its new smartphone unit reflects big hopes due to its earlier success with Internet TVs, while Lenovo’s replacement of its mobile chief reflects concerns about its smartphone unit.
LeTV mobile unit raises big cash
A trio of new smartphone stories are highlighting rapid changes in the highly competitive landscape, where a steady stream of new entrants is creating constant challenges for existing players. Many of the newest entrants aren’t really worth mentioning, as they come from state-run backgrounds and have little or no chance of success.
That’s certainly the profile for construction equipment maker Sany Heavy (Shanghai: 600031), which has no place in this smartphone race but has just unveiled its inaugural model anyhow. Meantime, the industry’s hottest new entrant is online video high-flyer LeTV (Shenzhen: 300104), whose newly formed mobile unit Leshi Mobile has just raised a cool $400 million in its first funding round. Finally there’s the struggling Lenovo (HKEx: 992), whose failure to make a strong name for itself in the space despite numerous advantages may have prompted the departure of its mobile division chief. Read Full Post…
Bottom line: Huawei’s big deal with JD.com reflects growing momentum that will see it overtake Xiaomi in China’s smartphone market by year end, while Qihoo’s boosting of its stake in its Coolpad joint venture could be a prelude to an eventual buyout.
Huawei’s Honor scores big smartphone win
Two big smartphone stories are in the headlines today, led by a massive new order for Huawei that could help it move up the charts to unseat the stumbling Xiaomi as China’s second largest manufacturer. Another struggling player is in the second headline, with software security specialist Qihoo (NYSE: QIHU) announcing it will boost its stake in its joint venture with Coolpad (HKEx: 2369), another former superstar that is fast fading out of the China smartphone race.
After a period of brief quiet at the start of this year, these latest developments reflect some major shuffling happening in China’s smartphone market, which is at once the world’s largest but also extremely competitive. The latest trends show that global giant Apple (Nasdaq: AAPL) has begun to resurge in the market, and that the stodgier Huawei is also rapidly moving up the food chain. Meantime, former high-flyers like Xiaomi and Coolpad seem to be moving in the other direction. Read Full Post…
