Tag Archives: ZTE

ZTE China. Latest Business and financial news of ZTE corporation news overview of an expert of Chinese Companies Doug Young

TELECOMS: ZTE Slapped with US Sanctions — Again

Bottom line: Washington’s new ban on ZTE from buying US-made components is not as political as China is portraying it, and is likely to be resolved within a few weeks after ZTE takes remedial actions related to its violation of an earlier agreement.

Washington cuts off ZTE from US suppliers

An ongoing tiff between Washington and ZTE (HKEx: 763; Shenzhen: 000063) is in the headlines yet again, with word that the US has banned all American companies from selling to the Chinese smartphone and telecoms equipment maker for seven years. This particular story is filled with political overtones due to the anti-China stance of Donald Trump, who has accused Beijing of unfair trade practices. But it’s also a tale that stretches back for at least six years, which means this story began well before the current US administration.

The latest headlines are quite straightforward, and have Washington banning the sale of US-made telecoms equipment to ZTE for violating an earlier agreement reached last year. (English article) The source of this conflict dates back to 2012, when Washington first began probing ZTE for selling American-made equipment to Iran in violation of US sanctions that at that time were designed to punish the country for its nuclear program. Read Full Post…

TELECOMS: Huawei Feasts on China Market

Bottom line: Huawei’s strong revenue and profit growth for 2017 are coming largely on the back of its home China market, which should continue to boost the company as Beijing aggressively pushes upcoming 5G services.

Huawei finds land of plenty in hometown market

Telecoms giant Huawei is in the headlines as the new week begins, with word that the company has rekindled its profit growth in its latest reporting year. Unlike other companies, Huawei isn’t publicly traded and thus isn’t required to release any financials, which always means we need to take their numbers with a slight grain of salt. But generally speaking the company does seem to be trying to report meaningful figures, at least based on past years when the results weren’t all that flattering.

This time around the results look good, at least the final ones for revenue and profit growth. But a closer look shows something that many of us know, namely that the company is heavily dependent on its home market for that relatively strong showing. Some of that is probably deserved, as Huawei has emerged as a maker of quality products for both its core networking equipment and also its newer smartphones, which count myself as one of their fans and owners. Read Full Post…

TELECOMS: Spurned by US, Huawei Turns to UK

Bottom line: Huawei’s latest big financial commitment to the UK is mostly for show, but Britain could still emerge as a winner over the longer term if Huawei conducts more R&D work in its British labs.

Huawei gives $4.2 billion gift to UK

After getting the cold shoulder from the US for its smartphones, telecoms superstar Huawei is turning increasingly to Europe, and specifically to Britain, for consolation. That’s the key takeaway from the latest reports that say Huawei has told British Prime Minister Theresa May that it will spend a further 3 billion pounds ($4.2 billion) on procurement from the UK on top of its other commitments to the country. (English article)

This particular move seems mostly political, and also it’s questionable how significant it is. Huawei made its commitment last week during a trip by Theresa May to China, and this kind of mega-commitment is quite common during these meetings between Chinese and global leaders. The fact of the matter is that Huawei posted 600 billion yuan ($97 billion) in sales last year, meaning it had to spend perhaps half of that amount, or around $50 billion, on procurement of various components for its core networking equipment and smartphones. Read Full Post…

SMARTPHONES: Dumped by AT&T, Huawei Enters US with Supermodel

Bottom line: Huawei’s decision to go ahead with a US market entry for its latest high-end phone, despite collapse of a tie-up with AT&T, is likely to produce very limited results due to lack of a carrier partner.

Huawei goes solo into US

If you can’t get a serious business partner, at least get a pretty face. That seems to be the message coming from a frustrated Huawei, which has announced it has signed on “Wonder Woman” star and model Gal Gadot as chief experience officer as it prepares to enter the US. This somewhat frivolous move was most likely part of a bigger announcement the company hoped to make for a grander entry to the US in partnership with corporate partner AT&T (NYSE: T).

But as many market watchers may already know, the AT&T deal reportedly collapsed at the last moment for unexplained reasons. The new tie-ups were all set to be unveiled at the Consumer Electronics Show (CES) taking place this week in Las Vegas. While the show went on and Huawei announced plans to release a version of its high-end Mate 10 in the US, with Gadot as product spokeswoman, the AT&T announcement never came. Read Full Post…

SMARTPHONES: ZTE Sees Double With New Smartphone

Bottom line: ZTE’s new dual-screen smartphone will turn some heads and raise the company’s profile briefly due to the novelty factor, but the effect will quickly fade due to lack of practical uses.

ZTE tries two screens

You can’t blame ’em for trying. That’s the first thing that came to mind when I saw the announcement and some photos of a new foldable ZTE (HKEx: 763; Shenzhen: 000063) smartphone with  two screens. This clearly looks like the company’s attempt to find new relevance in the cutthroat smartphone market, where phones increasingly look and feel the same. The move seems to be part of a recent trend that says “give them more space” on their screen, which others are trying to do by creating phones whose entire face is taken up by the screen.

I’m not really a gadget person, but from a business perspective I do have to credit ZTE for trying to find something new to distinguish itself from the pack. The company was one of China’s earliest success stories in the cellphone and later the smartphone space. But a big portion of its products still go to US wireless carriers who stamp their own brand on the phones and give little or no space to their Chinese supplier. Read Full Post…

TELECOMS: Huawei in US Hot Seat Over Iran Sales?

Bottom line: Huawei is likely to be found guilty of selling products to Iran in violation of US sanctions, and could be fined up to $2 billion but won’t face additional punishment.

Huawei being probed for Iran violations?

When word first emerged four years ago that telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) was being investigated for selling American equipment to Iran in violation of US sanctions, other reports also indicated that crosstown rival Huawei was also being probed over the same matter. Huawei’s name later disappeared from the headlines, though it was never really clear if the company had been cleared of suspicion in the matter. Now it appears the company may still be under investigation, meaning it could potentially be slapped with a fine even bigger than the nearly $1 billion levied on ZTE. Read Full Post…

SMARTPHONES: Oppo Shows India Resolve with Cricket Deal

Bottom line: Oppo’s major new cricket sponsorship deal shows its commitment to India, but may have to be renegotiated if and when the company’s fortunes decline in the next 1-2 years following its meteoric rise.

Oppo in India cricket deal

Smartphone high-flyer Oppo is trying to show the world it’s serious about India, with word it will pay 1.1 billion yuan ($160 million) for rights to sponsor the nation’s national cricket team. News of the deal comes just three months after China’s top smartphone brand announced plans to build a production facility in the hotly contested India market, which has become a magnet for Chinese brands over the last year.

All that raises the question of whether Oppo is for real, or just another passing fad in China’s constantly changing smartphone landscape. That landscape has seen players like Lenovo (HKEx: 992), Xiaomi and Huawei become dominant players in the world’s largest smartphone market one day, only to rapidly fade the next. It’s obviously still too early to say if Oppo will follow in that trajectory, though my educated guess would be the answer to that question is quite possibly “yes”. Read Full Post…

TELECOMS: ZTE Settles with US, Looks Forward

Bottom line: ZTE’s settlement with the US over illegal sales to Iran will help the company focus on the future, as it advances with plans to move away from low-margin businesses and find more promising new growth areas.

ZTE settles US accusations of illegal sales to Iran

After a year of living in a state akin to suspended animation amid a US probe against it for illegal sales to Iran, telecoms giant ZTE (HKEx: 763; Shenzhen: 000063) is finally seeing some light at the end of the tunnel, with word that it has finally reached a settlement in the matter. The company previously indicated the settlement would be no small deal, and the nearly $900 million fine it will have to pay proves that’s certainly the case.

But more important is the fact that ZTE has finally settled the case, meaning it can now get on with business without this major distraction hanging over its head. Before the settlement, ZTE had faced the possibility that it might get cut off from its key US suppliers as punishment for illegally selling US-made equipment to Iran in violation of earlier US sanctions against the country related to its nuclear program. Read Full Post…

SMARTPHONES: Xiaomi, Vivo Skip Barcelona Telecoms Bash

UPDATE: After publishing this earlier this morning, a source in Barcelona informs me that Oppo is indeed attending and is holding a press event to show off their newest products. Headline and photo caption changed to reflect Oppo’s attendance, but the rest of the original post remains the same.

Bottom line: The absence of Oppo and Vivo from the world’s top telecoms trade show in Spain this week reflects their overwhelming reliance on China sales, while Xiaomi’s absence from the show could be a cash conservation move.

Vivo, Xiaomi absent from top telecoms trade show

Most eyes from the telecoms world will be focused on Barcelona this week, where an annual show that’s arguably the world’s most important for smartphones is taking place. That seems like a good opportunity to look at who from China’s crowded smartphone arena is attending this year’s Mobile World Congress (MWC) in Spain, even though I’m personally not at the show.

Attending the event is by no means cheap, which is probably why some companies may choose the skip the affair. But the decision to attend or not does provide some insight as to what companies are thinking, since you would expect anyone with truly global aspirations to make an appearance at this showcase for the newest telecoms products. Read Full Post…

CONSUMER: ZTE Hops Into Smart Cars, Gome Into Smartphones

Bottom line: ZTE’s move into smart cars and Gome’s into smartphones follow a typical Chinese pattern of herd mentality investing, and are both likely to fare poorly. 

ZTE buys car maker Granton

A couple of headlines are shining a spotlight on the herd mentality you often see among Chinese companies looking for the next big growth opportunity. One of those has telecoms stalwart ZTE (HKEx: 763; Shenzhen: 000063) buying a small bus maker, parroting a trend among a growing number of firms who see the future in smart vehicles. The other has the increasingly irrelevant electronics retailer Gome (HKEx: 493) rolling into the smartphone business, an area in desperate need of consolidation due to cutthroat competition. Read Full Post…

SMARTPHONES: Oppo Surges, Xiaomi Tries New Look, ZTE Resets

Bottom line: Huawei may have lost its top position in China’s smartphone market in the third quarter, while Xiaomi’s new model with a screen that takes up the entire front surface could bring some buzz back to the company.

Huawei loses ground in China smartphone race

A trio of smartphone headlines nicely summarize the rapid changes constantly gripping the space, where today’s superstar can become little more than a footnote in just a year. The latest rising superstar Oppo is leading the headlines, with a new report saying it overtook Huawei to become China’s smartphone leader in the third quarter. Meantime, former market leader Xiaomi is also in headlines as it rolls out a new intriguing model in a bid to regain its former glory. Last but not least is the faded ZTE (HKEx: 763; Shenzhen: 000063), one of the industry’s oldest players, which is changing smartphone chiefs in its own bid to find new relevance in the tough market. Read Full Post…