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Bottom line: TCL’s cellphone unit is experiencing a sharp decline due to lack of forward-thinking, but is taking steps that could give it a good chance to rebound next year.
Related postings 相关文章:
◙ TCL Comeback Gains Momentum with Italy Deals TCL牵手意大利 复苏之势获动力
◙ All Eyes Turn to TV in TCL Comeback
◙ Low-Cost Apple iPhone to Bite ZTE, Lenovo 苹果推低端iPhone 冲击中兴和联想
What looks like a new wrinkle has emerged in the growing love affair between Chinese PC giant Lenovo (HKEx: 992) and Japanese electronics giant NEC (Tokyo: 6701), in what could well end up as a marriage that could serve as a template for similar Sino-Japanese tie-ups in the consumer electronics space. Media are reporting that NEC has announced it will once again enter the China cellphone market 6 years after its high-profile departure, with plans to sell a smartphone model, as well as 2 tablet PCs. (English article) Historians will recall that NEC left China back in 2006, at the time citing mismanagement for its decision to leave the world’s largest cellphone market. Of course the real issue was that its phones had become virtually invisible in the market, paralleling a trend in the rest of the world that has seen not only NEC but most Japanese brand cellphones and PCs become non-players nearly everywhere except for their highly protected home market. So what’s different now that would embolden NEC to return to China, the world’s biggest mobile market but also an incredibly competitive one where consumers are especially price sensitive and NEC has little or no brand recognition? The answer is: Lenovo. Last year the 2 companies entered into an interesting agreement that effectively saw Lenovo take over NEC’s PC operations through the establishment of a joint venture. (previous post) Lenovo followed later by saying it may move some of its production to Japan, in what looked like a bid to ease concerns from NEC’s Japanese customers who were undoubtedly worried that their computers could suffer a quality downgrade if all production was moved to China. (previous post) This kind of tie-up looked interesting as it had the potential to provide Lenovo with a quick entry to the lucrative Japan market that has been one of the toughest for foreign brands to tap due in part to local preference for domestic brands that are perceived as higher quality. It also gave Lenovo, the world’s second biggest PC maker, a new premium brand to market outside Japan through its numerous sales channels in both western and developing markets. There aren’t any details in the latest reports about NEC’s decision to re-enter China’s cellphone market, but I would be willing to bet that Lenovo, as China’s dominant PC player with about a third of the market, will be a strong partner behind the scenes, providing NEC with access to its strong sales and service networks throughout the country. Furthermore, while the Lenovo name is synonymous with good quality PCs in China, the same is hardly true for its cellphones, which have had a much more difficult time establishing a strong name in the company’s home market as it vies with better known names like HTC (Taipei: 2498), Apple (Nasdaq: AAPL) and up and comers Huawei and ZTE (HKEx: 763; Shenzhen: 000063). This NEC move back into China, if Lenovo is really involved, could provide Lenovo with an important new premium brand that doesn’t have any of the baggage associated with its own cellphones. That could pave the way for an eventual joint venture for the NEC cellphone brand similar to the 2 companies’ PC tie-up. In fact, TCL (Shenzhen: 000100; HKEx: 2618), another Chinese brand known for its cheap cellphones, made a similar shift with its purchase of the Alcatel cellphone brand name around 5 years ago, and Alcatel-branded phones now account for the lion’s share of its sales outside China. So, what exactly is the end game in this growing love affair between Lenovo and NEC? If the PC partnership proves successful in Japan and this new NEC cellphone initiative in China is also a success, I could easily see an eventual sale in the next 2-3 years that would see Lenovo acquire outright NEC’s PC and cellphone units, 2 of its main consumer electronics businesses. Such a deal could serve as a template for future tie-ups between Chinese electronics companies and their Japanese counterparts. Chinese companies could use such deals to shed their image as makers of cheap, lower-end products, while Japanese firms could shed their increasingly unprofitable and marginal electronics businesses.
Bottom line: NEC’s re-entry to the China cellphone market looks like the latest wrinkle in its growing ties with Lenovo, which could ultimately result in a longer-term marriage.
Related postings 相关文章:
◙ Lenovo Considers Japan Production 联想向日本转移制造业务为明智公关手段
The following press releases and media reports about Chinese companies were carried on February 28. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
◙ Sina (Nasdaq: SINA) Reports Q4 and Fiscal Year 2011 Results (PRNewswire)
◙ 177 Group Buy Sites Close in January (Chinese article)
◙ ZTE (HKEx: 763) to Challenge Global Handset Leaders with New Handset Ranges (Businesswire)
◙ TCL (Shenzhen: 000100) Jumps 2.5 Fold on Strength of Home Electronics (Chinese article)
◙ Muddy Waters Losing Support in Market as Latest Calls Prove Inconclusive (English article)
◙ Latest calendar for Q4 earnings reports (Earnings calendar)
I’ll start off today with a couple of news bits from Germany, one from the industrial equipment sector where Sany Heavy Industry (Shanghai: 600031) has made a major acquisition, and the other from the solar sector where Yingli (NYSE: YGE) has made a major sale. These 2 deals don’t really have much in common beyond the fact that both are in Germany, but for me the former illustrates a dubious approach for Chinese firms that want to enter Europe’s largest market, while the latter looks much more prudent. The first deal will see Sany acquire Putzmeister Holding, a concrete pump maker, in a purchase both companies say is the largest ever for a Chinese firm in Germany. (English article) The fact that they don’t give a price leads me to believe Sany didn’t give much cash for this deal, but rather is going to assume a big debt load for a company that may be marginally profitable or is more likely losing money. That would follow a pattern by other Chinese companies in Western Europe, including TCL’s (Shenzhen: 000100) purchase of the TV assets of France’s Thomson and the purchase of Siemens’ cellphone business by Taiwan’s BenQ, both of which ended in complete disasters and nearly drove their acquirers to financial ruin. In this case Sany looks equally unprepared for such a purchase, especially dealing with Germany’s tough labor laws and unions, and I see bad things ahead for both companies. In the other deal, Yingli has signed a deal to sell up to 200 megawatts worth of solar modules to a German company, IBC Solar AG, including 180 megawatts in 2012 alone. (company announcement) This kind of deal is of course much more traditional, involving a simple sale of products that has much less risk involved than the M&A approach being used by Sany. It also comes as Germany prepares to cut back many of its government incentives for installation of new solar projects, and looks like Yingli and IBC are racing to take advantage of some of those incentives while they can. (previous post) My final comment on these deals would be: Nice job on a big sale for Yingli, and, Look for stormy weather ahead, Sany.
Bottom line: Sany’s purchase of a German firm will see numerous problems in the next 2 years, while Yingli’s latest German sale looks like a major deal before government incentives are reduced.
Related postings 相关文章:
◙ LDK’s German Buy: Two Losers Combine 赛维LDK收购Sunways将使前者境况雪上加霜
◙ More Turbulence For Alternate Energy
◙ Year End Brings Problematic New IPO Wave 中国新一波IPO潮或无法达预期效果
Apple (Nasdaq: AAPL) has taken the interesting step of getting 40 new patents in China, in what looks like an opening move that could ultimately see it target the growing number of Chinese cellphone makers that use Google’s (Nasdaq: GOOG) popular Android cellphone operating system. (English article) The report in the China Daily focuses on the more obvious potential aims of the patents, such as closing a slew of bogus Apple stores that have sprung up in China as Apple’s sales have soared to surpass those of leading PC maker Lenovo (HKEx: 992). (previous post) But the article points out the new patents also cover Apple’s popular user-friendly smartphone operating system (OS), which has been largely responsible for the huge boom in its iPhone and smartphone sales in general over the last 3 years. Apple has argued that Google’s free Android OS, which has been embraced by many of the world’s top cellphone makers, is a copycat of its own OS, and has successfully sued to halt the sale of popular Android-based smartphones and tablet PCs from Taiwan’s HTC (Taipei: 2498) and Korea’s Samsung (Seoul: 005930). Based on that behavior, this new round of patent filings in China looks like Apple is preparing to sue Chinese smartphone makers like ZTE (HKEx: 763; Shenzhen: 000063), Lenovo and TCL Communications (HKEx: 2618; Shenzhen: 000100), which all use Android. ZTE in particular could be at big risk, as its recent drive to become a global leader in smartphones costing as little as $100 each (previous post) relies heavily on Android. If Apple does file such a lawsuit, it will be interesting to see how China’s courts react as obviously any ruling in Apple’s favor could deal a big blow to the domestic industry. But anyone industry watchers should also note that Chinese courts don’t appear to have any power to make temporary rulings like judges do in the US, meaning any enforcement action can only occur after a judge makes a final decision — a process that could take months or even a year. Still, considering Apple’s success so far in the US against giants like Samsung and HTC, Chinese smartphone makers would be well advised to start drawing up plans for new Android alternatives if and when Apple moves its anti-Android battle to China.
Bottom line: Apple’s new round of patents in China look like the prelude to lawsuits against domestic smartphone makers like ZTE, which rely heavily on Google’s free Android operating system.
苹果(AAPL.O)在华成功申请了40项新专利，其终极目标看似是对采用谷歌(GOOG.O)Android系统的中国手机商亮剑的第一步。《中国日报》的报导侧重苹果旨在专利维权的一面，例如关闭苹果山寨零售店等。由于苹果电脑在华销量大涨，超过PC领军企业联想(0992.HK)，苹果山寨店如雨後春笋般涌现。但文章指出，苹果新申请的专利还包括其界面友好的智能手机操作系统(OS)，这一操作系统是过去三年推动iPhone和智能手机销量整体上升的重要原因。苹果辩称，全球许多顶级手机商采用的谷歌免费提供的Android系统，是抄袭苹果OS系统的设计。苹果还在宏达电(HTC)(2498.TW)和三星(005930.KS)专利侵权案中胜诉，成功迫使两家公司的Android智能手机和平板电脑暂停销售。鉴于此举，苹果在华新一轮的专利申请，看似将准备起诉使用Android系统的中国智能手机制造商，例如中兴通讯(000063.SZ; 0763.HK)、联想和TCL通讯(2618.HK)。中兴通讯面临的风险尤其大，因为其近期力争成为售价低至100美元的智能手机的全球领军企业，该公司的这一计划严重依赖Anroid系统。如果苹果提出侵权诉讼，中国法院如何回应是件有趣的事情，因为任何明显有利于苹果的判决，都将重创中国手机产业。但业内观察者也指出，中国法庭进行终裁後才会有执行举措，而法庭裁判过程往往耗时数月甚至一年。话说回来，考虑到苹果在美胜诉三星和宏达电侵权，中国智能手机商最好早做打算，制定替代Android的新计划，以防苹果万一在华打响反击Android战役。
一句话：苹果在华新一轮专利申请，看似是起诉中兴通讯等中国智能手机商的前奏，这些本土企业严重依赖谷歌免费提供的Android操作系统。
Related postings 相关文章:
◙ Low-Cost Apple iPhone to Bite ZTE, Lenovo 苹果推低端iPhone 冲击中兴和联想
◙ Apple on a China Roll, Ambushing Nokia, Lenovo 苹果伏击诺基亚和联想 在华发展势如破竹
Well, it seems we now know at least one company that’s going to adopt Baidu’s (Nasdaq: BIDU) new mobile operating system, which it launched with fanfare last week (previous post) even as many wondered how the new OS would compete with far more popular rival products from Google (Nasdaq: GOOG), Apple (Nasdaq: AAPL) and Microsoft (Nasdaq: MSFT). For those who haven’t read the headlines, the answer is Dell (Nasdaq: DELL), once the world’s largest PC maker which has struggled in recent years amid fierce competition and a rapidly morphing new array of computing products constantly coming out. (English article; Chinese article) Many observers were skeptical about this new tie-up, and I’ll admit that I am one of them. After all, Google’s Android, Apple’s mobile OS and Microsoft’s Mango are all backed by companies with far more resources, and Baidu’s own
history at new product development isn’t very strong. But I’ll also take this rare opportunity to break with the critics and say that Baidu’s new OS at least offers an interesting China-specific alternative to the other products on the market, as well as special access to Baidu’s market-leading search technology. Baidu has already proven that Chinese Web surfers do prefer a China-specific product to a one-size-fits-all approach like Google’s or Yahoo’s (Nasdaq: YHOO), so perhaps the same will be true for mobile Web surfing. Still, Dell is hardly a big name in the mobile Internet space, and, in fact, I don’t think I’ve ever seen anyone here in China using a Dell brand mobile phone or tablet PC. To succeed, Baidu will have to sign up some bigger cellphone makers in the next few months, with domestic names like ZTE (HKEx: 763; Shenzhen: 000063), Lenovo (HKEx: 992), TCL (Shenzhen 000100) and Huawei looking like the best candidates. If it can do that, and if its mobile OS proves reliable and user friendly, I would give it as high as a 50 percent chance of gaining a significant portion — perhaps up to 15 or 20 percent — of China’s mobile OS market.
Bottom line: Baidu’s tie up with Dell is a symbolic but largely empty first step to promote its new mobile OS, and it will need to sign up more major cellphone makers for a chance at success.
百度(BIDU.O)上周推出易百度移动平台，尽管许多人猜测，易平台如何与更受欢迎的谷歌(GOOG.O)、苹果(AAPL.O)和微软(MSFT.O)的同类产品竞争，但我们目前知道，至少有一家公司将使用易平台。如果你还没看今天的头条新闻，不妨告诉你吧，这家公司是戴尔(DELL.O)。戴尔曾是世界第一大PC制造商，近些年在激烈的竞争中苦苦挣扎，并面临如雨後春笋般涌现的电脑类新产品的挑战。许多观察人士质疑百度和戴尔的合作，我承认我就是其中一个。毕竟，谷歌Android、苹果OS和微软Mango得到拥有更多资源的公司的支持，而百度历来新产品研发记录并不太好。但我也愿意借这次罕见的机会，不再提出批评意见，我想说，百度易平台至少可以提供一个有中国特色的有趣选择，这也是搭载百度搜索技术的特殊途径。百度已经证明，与谷歌或雅虎(YHOO.O)“一刀切”的产品相比，中国网民确实更青睐有中国特色的产品，所以，或许这种情况也适用于手机上网。但戴尔在手机互联网领域并不知名，事实上，我在中国没见过有人用戴尔手机或平板电脑。若想成功，百度未来数月应与一些更大的手机商合作，中兴通讯(000063.SZ; 0763.HK)、联想(0992.HK)、TCL (000100.SZ)和华为等国内手机商看似是最佳选择。如果百度能与这些手机商签单，证明易平台可靠且人性化，我认为，百度有50%的机率，占据移动平台市场较大份额，这一比例或高达15-20%。
一句话：百度与戴尔联手的象征意义大于实质，是其推广易平台的第一步，百度需要与更多大型手机商合作，才有望取得成功。
Related postings 相关文章:
◙ Baidu Mobile OS, Homepage Revamp Look Like Dicey Bets 百度新举措旨在冒险一搏
Interesting reports coming out of Korea hint that LG Display (Seoul: 034220) may be having second thoughts about building a state-of-the-art LCD plant in China, despite years of lobbying for just such a move, in what could actually be a good development for China’s tech sector. Media are reporting that LG Display, which together with hometown rival Samsung Electronics (Seoul: 005930) and Taiwan’s AU Optronics (Taipei: 2409) received permission to operate cutting edge LCD plants in China early this year, has now put its hard-won approval on hold, believing that global capacity for LCDs may be sufficient and peaking as the technology matures. (English article) I must say that I quite agree with this view, as large LCD screen products could well be headed into a permanent downcycle as rival products based on more power-efficient LED technology gain momentum with larger and larger screens boasting higher resolution hitting the market. The power consumption argument is critical especially for portable devices, as LED-based tablet and notebook computers get significantly more battery life using than LCD-based products. The rise of LEDs could make the looming LCD downturn even more painful with the addition of major new capacity in China being built not only by Samsung and AU, but also a major new plant operated by domestic player TCL (Shenzhen: 000100), which counts Samsung among its investors. If the Korean reports are true, and I suspect they are, I wouldn’t be surprised to see Samsung, AU Optronics, and Taiwan’s Chimei Innolux (Taipei: 3481), which also has China aspirations, make similar adjustments to their China strategy. While China would lose out in the short term as investment dollars for LCD projects are scrapped, it would actually benefit in the longer term by largely skipping the LCD chapter of the video screen story, and instead jumping directly to next-generation LEDs.
Bottom line: LG Display’s potential scrapping of its China LCD plans are an early indicator that China could become a global leader in next-generation LED production.
Related postings 相关文章:
◙ AU Plays Catch-Up With China Panel Plan 台湾友达在大陆LCD面板争夺战中占得先机
◙ TCL on the Comeback Trail With Samsung Tie-Up TCL与三星结盟 重振旗鼓
◙ TCL Comeback Gains Momentum with Italy Deals TCL牵手意大利 复苏之势获动力
The rest of the world may be buzzing about Steve Jobs’ announcement that he will retire as CEO of Apple (Nasdaq: AAPL), but my attention has been captured by a smaller piece of news that Apple may soon enter the low-cost smartphone business. Apple never discusses its future plans, and accordingly this latest piece of news is only gossip so far, citing two knowledgeable sources saying a low-cost version of the iPhone 4 is now being developed to go head-to-head with a segment of the market now dominated by phones running on Google’s (Nasdaq: GOOG) free Android operating system. (English article) If true, such a development could provide not only headaches for Google and Android, but also for the growing field of Chinese smartphone makers that have relied on the free operating system to develop low-cost models favored not only in developing markets like China, but also by cost-conscious consumers in developed markets like the US and Western Europe. Up-and-comer ZTE (HKEx: 763; Shenzhen: 000063) would be most vulnerable to such a move by Apple, having staked its future on grabbing global market share with its low-cost Android based smartphones. Other companies that look vulnerable include Lenovo (HKEx: 992), whose young smartphone initiative is already sputtering just a year after its launch, and ZTE rival Huawei, which is also trying to make a splash with smartphones as growth for its older telecoms equipment business starts to slow. Such a move by Apple could also hit the prospects of TCL Communications (HKEx: 2618), whose cellphone business has posted a strong comeback in the last year after taking a serious hit after it acquired money-losing assets from Alcatel (Paris: ALUA) six years ago. I actually know the Reuters reporters who wrote the Apple low-cost iPhone story, and both are quite reliable so I’m fairly confident it’s only a matter of time before low-end iPhones hit the market. If and when that happens, look for the Chinese smartphone makers to suffer big headaches as a result.
Bottom line: Apple’s launch of a low-end iPhone could further cement its dominance in the global smartphone market, at the expense of Chinese players like ZTE, Lenovo and Huawei.
当人们热议乔布斯辞去苹果(AAPL.O)首席执行官（CEO）职务时，我关注的新闻是，苹果或即将打入低端智能手机市场。苹果从不讨论其未来计划，但两名消息人士透露，苹果正在研发低端版iPhone 4，将与谷歌(GOOG.O)Android操作系统手机占据的一部分市场进行正面交锋。尽管这还只是传闻，但如果消息属实，这一研发不仅让谷歌和Android业者头痛，也会让中国智能手机制造商苦不堪言。後者依赖免费的Android操作系统，研发低成本机型，这些低端机型不仅受到中国等发展中国家青睐，在美国和西欧等发达市场，也受到节俭消费者的欢迎。苹果此举或让中兴通讯(0763.HK)(000063.SZ)最“受伤”。中兴将公司未来押宝在利用低端Android智能手机掠夺全球市场的战略上。其它容易受创的公司包括联想(0992.HK)和华为。联想启动仅一年的智能手机项目已取得不俗成效，华为则因电信设备业务增长放缓，同样试图推智能手机业务提振业绩。苹果推低端版iPhone也会对TCL通讯(2618.HK)发展造成影响，TCL通讯六年前收购阿尔卡特-朗讯(ALUA.PA)亏损的手机资产後一度严重受创，但去年该部门业绩强势反弹。我认识报导苹果可能推低端版iPhone手机消息的两位路透记者，他们的消息都很可靠，所以我很有理由相信，该款手机上市只是时间问题。如果苹果发布低端版iPhone 4，我预计将让中国智能手机商极为头痛。
一句话：苹果推出低端版iPhone，或进一步巩固其全球智能手机市场主导地位，代价则是中兴通讯、联想和华为等中国手机制造商受到冲击。
Related postings 相关文章:
◙ China Mobile Nears iPhone Deal, Continues 4G Press 中移动iPhone协议近尾声 加紧4G攻势
◙ Apple on a China Roll, Ambushing Nokia, Lenovo 苹果伏击诺基亚和联想 在华发展势如破竹
It’s Monday morning, which means there’s not too much news in the market yet and instead it’s a good time for one of my period looks at the broader auto industry. A wide array of new data is out on July sales, which show the continuing decline of China’s top 3 independent auto brands, BYD (HKEx: 1211), Chery and Geely (HKEx: 165). BYD’s top-selling model, the F3, continued its plunge in July, with sales down 41 percent from a year earlier. Sales for Chery’s top model, the QQ, grew just 0.9 percent, lagging the broader market and causing it to lose share. Geely doesn’t have a model in the top 20, but its overall sales fell 6.3 percent in July, a month when overall passenger vehicle sales rose 12 percent. The stumbling of these top 3 domestic brands bears a striking resemblance to a similar trend from six or seven years ago, when domestic cellphone makers like TCL (HKEx: 2618) and Ningbo Bird suddenly emerged to challenge the then-dominant positions of market leaders Nokia, Motorola and Samsung. But in that instance the domestic firms soon fell almost as quickly as they rose, never to return in most cases. The reason was relatively simple: they all soared to prominence on the strength of one or two popular models that captured the public’s interest. But then they failed to follow with more popular models in an industry where product life-cycles typically run around 2-3 years, causing them to quickly fade. The same now appears to be happening with these domestic car makers. Both BYD and Chery found quick success with the F3 and QQ, respectively, but are now struggling to develop popular new models as these successful ones near the end of their life cycles. If they fail to find other new hits soon, they could easily find themselves following in the footsteps of faded names like Ningbo Bird and TCL.
Bottom line: Domestic Chinese car brands Geely, BYD and Chery face a slow decline into irrelevance unless they can develop new models to replace their fast-fading older popular ones.
Related postings 相关文章:
◙ Ford Comments Signal Accelerating Price Pressure 福特暗示中国车市价格压力加剧
◙ Nissan Jumps on China Expansion Bandwagon, Overcapacity Ahead 日产加入中国市场扩张潮 未来料产能过剩
TCL Corp’s (Shenzhen: 000100) latest results reveal its comeback story is still alive, although the focus has shifted from cellphones to its older TV business as the company refinds its footing in both areas. The latest results show that TCL’s profit more than tripled in the first half of the year to nearly $100 million, while its revenue grew a more modest 18 percent to about $4.2 billion. 
(English article) The driving force behind its profit growth was the TV business, TCL Multimedia (HKEx: 1070), which returned to profitability after a loss a year earlier and generally poor performance in recent years after its difficult purchase of Thomson Electronics’ TV business in 2005. Strong performance in emerging markets like Brazil and Indonesia were largely to credit, as TCL returned to its roots as an emerging market specialist. The cellphone business, TCL Communication (HKEx: 2618) underwent a similar steep downturn after its purchase of Alcatel’s (Paris: ALUA) cellphone assets around the same time, but came back last year with triple-digit gains on both the top and bottom line as it finally managed to leverage the Alcatel brand name to score major overseas deals. Not too surprisingly, the blistering growth for cellphones slowed quite a bit in the first half, with revenue up just 27 percent and profit up 50 percent. TCL’s charismatic chairman Thomson Li held a news conference to discuss the results, in which he chastised reporters for writing off the Alcatel and Thomson acquisitions as disasters. (Chinese article) I was one of those reporters who considered both purchases disastrous, but will admit that Li seems to have salvaged both deals, largely by shifting all of Thomson’s and Alcatel’s production to China while continuing to use their global brands to develop international sales. For now at least, the big story at TCL’s comeback seems to be shifting to the TV business and its future potential, while the cellphone business looks set for a rapid slowdown.
Bottom line: TCL Corp looks like a good investment bet based on a comeback for its TV business, while its cellphone business looks set to slow sharply after a strong comeback last year.
Related postings 相关文章:
◙ TCL Comeback Gains Momentum with Italy Deals TCL牵手意大利 复苏之势获动力
◙ Youku, TCL Discover Hollywood in New Tie-Ups 优酷、TCL双双联手好莱坞大品牌
◙ TCL on the Comeback Trail With Samsung Tie-Up TCL与三星结盟 重振旗鼓
