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

News Digest: February 15, 2012 报摘： 2012年2月15日

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The following press releases and media reports about Chinese companies were carried on February 15. To view a full article or story, click on the link next to the headline.

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◙ HP’s (NYSE: HPQ) China PC Market Share Drops to 5.3% (English article)

◙ Renren (NYSE: RENN) Updates Preliminary Q4 Results and Q4 Earnings Date (PRNewswire)

◙ ZTE (HKEx: 763) Announces Progress of Material Litigation With Ericsson (HKEx announcement)

◙ Amazon (Nasdaq: AMZN) Removes iPad From China Site, GOME, 360Buy Still Selling (Chinese article)

◙ Yahoo (Nasdaq: YHOO)-Alibaba Talks At An Impasse: Sources (English article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Huawei and ZTE: Swapping Networking for Cellphones? 华为和中兴：转型进军手机市场？

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Telecoms superstars Huawei and ZTE (HKEx: 763; Shenzhen: 000063) continue to send out new signals underscoring how serious they are about developing their cellphone business, as both realize that growth potential could be severely limited for their traditional networking equipment business. In yet the latest signal coming from Huawei, the company is bragging that it shipped some 20 million smartphones last year, up 5-fold over the previous year. (Chinese article) That figure was enough to propel Huawei to the world’s sixth largest cellphone seller in 2011, with total cellphone sales jumping 40 percent to $6.8 billion. Of course that is still just a small part of the company’s overall sales, which are now in the $30 billion range. But Huawei clearly has big plans in the cellphone space, saying late last year it aims to become one of the world’s top 3 brands in the next 5 years. (previous post) Crosstown rival ZTE has made similar moves into the cellphone space, and has become particularly aggressive into low-end smartphone by making Android-based models that retail for less than $100. ZTE has also previously said it aims to become one of the world’s top 5 cellphone makers within the next 2 years, meaning that both of these Chinese companies could finding themselves increasingly fighting for the same customers on the global stage. The drive into cellphones, while risky and more competitive than traditional telecoms networking equipment, looks like a smart move for both companies, which increasingly realize that their traditional business is a difficult one with limited growth potential. Most of the world’s major telecoms equipment players are now struggling or have left the business outright, with names like Motorola and Nortel that were dominant players just a decade ago now non-existent. The few remaining names, including Nokia Siemens Networks and Alcatel Lucent (Paris: ALUA) have also struggled to remain profitable, with both making recent layoffs. Even Huawei itself reportedly recently delayed plans for a new factory in the important India market, where new network construction has virtually come to a halt amid a major government corruption scandal. (previous post) The networking equipment business is also notoriously cyclical, unlike cellphones that experience relatively constant demand. With all those factors in play, it’s not surprising to see both Huawei and ZTE looking to cellphones for stability, and I wouldn’t be surprised to see at least one of these 2 companies become one of the world’s top 3 brands in the next 3-5 years.

Bottom line: Huawei and ZTE are pursuing cellphones in response to higher risk and slowing growth in their networking business, with at least one likely to become a top global player in the space.

Related postings 相关文章:

◙ Huawei Discovers Cellphones 华为手机要向世界前三进军

◙ ZTE Gambles With Smartphone Share Grab 中兴通讯押注智能手机业务

◙ Huawei Puts Brakes on India Drive 华为印度建厂计划推迟

News Digest: January 18, 2012

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The following press releases and media reports about Chinese companies were carried on January 18. To view a full article or story, click on the link next to the headline.

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◙ ZTE (HKEx: 763) Aims to Pass Rival Huawei in Smartphone Sales in China (English article)

◙ China Telecom (HKEx: 728; NYSE: CHA) Targets Sales of 45 Mln Smartphones in 2012 (English article)

◙ New Oriental (NYSE: EDU) Announces Results for Fiscal Q2 Ended Nov 30 (PRNewswire)

◙ Ku6 Media (Nasdaq: KUTV) and YouTube Form Tie-Up, Ku6 Stocks Jumps 139 Percent (Chinese article)

◙ Ming Yang (NYSE: MY) Announces Issuance of Up to RMB 1.0 Billion 3 Year Notes (PRNewswire)

Huawei Discovers Cellphones 华为手机要向世界前三进军

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Huawei Technologies, one of China’s most successful exporters but also one of its most frustrated, is following in the footsteps of crosstown rival ZTE (HKEx: 763; Shenzhen 000063) in discovering cellphones, a far less controversial product than its traditional networking equipment business. The move looks like a smart one for Huawei, even if the company is a little late coming to this product area, with many interesting implications. Chinese media are quoting an executive saying Huawei is aiming to become one of the world’s top 3 cellphone makers within the next 5 years — a big order for a company that is currently just a minor player but certainly not impossible for one with Huawei’s vast resources. (Chinese article) Equally significant was where the executive made his remarks, namely at the Consumer Electronics Show (CES) last week in Las Vegas, the world’s largest consumer electronics show that Huawei was attending for the first time. The new push will add an interesting new competitor to the market, posing a challenge not only for domestic rivals like ZTE and Lenovo (HKEx: 992), but also for foreign companies like Motorola Mobility (NYSE: MMI) and even faded global leader Nokia (Helsinki: NOK1V). Huawei is no doubt finally realizing that cellphones are far less sensitive as a product than its core telecoms equipment business, which is showing signs of quickly slowing amid resistance in western markets like the US, where security is a concern (previous post), and even in India, where a corruption scandal has brought the industry to a standstill. (previous post) As a product area, cellphones are also far less cyclical than traditional networking equipment, whose sales tend to spike when new technologies like 4G or wi-fi come out, but then subside afterwards. Lastly and perhaps most interesting, the development of a strong cellphone business could provide Huawei with an opportunity for something that’s been talked about for years but has never happened, namely a Huawei IPO. Huawei tried to sell of its cellphone business several years ago but failed after it didn’t get the price it wanted. But that business was very small at the time, making it not very attractive to outside buyers. If it was one of the world’s top 3 players, on the other hand, it would certainly become a much more attractive candidate for an international IPO, finally giving investors a chance to buy into this interesting buy controversial company.

Bottom line: Huawei’s new drive into cellphones could create a major new global player in a short time, with a potential IPO for the unit in the next 5 years if the drive is successful.

Related postings 相关文章:

◙ Huawei Puts Brakes on India Drive 华为印度建厂计划推迟

◙ US China Bashing Hits New High With Telecoms Probe 华为中兴应巧选时机应对调查

◙ ZTE Gambles With Smartphone Share Grab 中兴通讯押注智能手机业务

Huawei Puts Brakes on India Drive 华为印度建厂计划推迟

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Telecoms equipment maker Huawei Technologies, which hit numerous roadblocks ast year in its drive to enter the US, has hit another obstacle in the fast developing and important India market as well, indefinitely postponing plans to build a major factory there. (Chinese article) The decision comes a couple of years after a major flare-up between China and India that saw the latter ban the import of telecoms equipment from both Huawei and Chinese rival ZTE (HKEx: 763; Shenzhen: 000063) for several months over security concerns. This latest move by Huawei, which probably would have involved an investment of $100 million or more, looks more related to a series of government corruption scandals that has gripped India’s telecoms industry in the last year, paralyzing new development. Reports in the Chinese media cite a Huawei official saying the new plant was designed to localize more of the company’s production and also address some of India’s security concerns, but that recent sputtering demand in light of the industry’s paralysis has made such new investment unnecessary. That kind of explanation is probably true, but also means that both Huawei and ZTE will take a hit in their India business this year, which is one of their most important Asian markets. It also shows that Huawei and ZTE will continue to face numerous obstacles as they try to expand in overseas markets, where concerns run high that their equipment may contain security loopholes designed for Beijing to use for spying purposes. Huawei has met with repeated resistance in the US due to such concerns, and with the presidential election coming there this year I wouldn’t expect the company to make its first major deal in the market until 2013 at the earliest. That reality, combined with the latest problems in India and weakening demand in Europe as it struggles with its ongoing debt crisis, means that 2012 could be a bleak year for both Huawei and ZTE in terms of telecoms equipment sales, with no relief in sight until 2013 at the earliest.

Bottom line: Huawei’s plans to delay construction of a major new factory in India reflects recent difficulty in the important market, and augers a difficult year for the company in 2012.

Related postings 相关文章:

◙ US China Bashing Hits New High With Telecoms Probe 华为中兴应巧选时机应对调查

◙ Huawei: Fight Them With Innovation 华为欲借创新论低调进军美国市场

◙ Huawei Undermines US Push With Foolish Request 华为讨要说法很不明智唯有阻碍进军美国市场

News Digest: December 14, 2011

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The following press releases and media reports about Chinese companies were carried on December 14. To view a full article or story, click on the link next to the headline.

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◙ HTC (Taipei: 2498) Sues Citi (NYSE: C) in Taiwan After Share Price Fall (English article)

◙ Sinopec, (HKEx: 386) ENN (HKEx: 2688) In $2.2 Bln Bid For China Gas (HKEx: 384) (English article)

◙ SouFun (NYSE: SFUN) Declares Cash Dividends to Shareholders (Businesswire)

◙ Alibaba Says Etao Search Engine Won’t Think About Profits For 3 Years (Chinese article)

◙ ZTE (HKEx: 763) 2011 Smartphone Sales Top 12 Mln (Chinese article)

Spreadtrum, Mediatek in Cheap Smartphone Plays

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Two chip designers, Taiwan’s MediaTek (Taipei: 2454) and China’s own Spreadtrum (Nasdaq: SPRD) are looking like interesting bets these days, as they seek to profit from burgeoning demand for cheap smartphones in emerging markets like China and India where carriers are trying to boost recently built 3G networks. In fact, MediaTek has always been a specialist at cheap cellphone chips, allowing it to play at the low end of a market otherwise dominated by the likes of Qualcomm (Nasdaq: QCOM) and Texas Instruments (NYSE: TXN). It entered the smartphone market with an Android-based chip earlier this year, and, after landing supply deals with names like Lenovo (HKEx: 992) and ZTE (HKEx: 763; Shenzhen: 000063) is reportedly in talks for another big deal that could see it supply Huawei, another leading cheap smartphone maker. (English article) Meantime, Spreadtrum is making its own interesting cheap smartphone play, focusing on the very limited market making chips for the homegrown Chinese 3G standard known as TD-SCDMA, whose only major proponent is China Mobile (HKEx: 941; NYSE: CHL). Spreadtrum has just announced its launch of an ultra-cheap chipset that will allow handset manufacturers to make TD-SCDMA smartphones for as little as $40 each, meaning such phones could easily retail below the $100 mark considered a key threshold for cost-conscious middle- to lower-end users. (company announcement) A lack of compelling handsets has been a major factor hindering China Mobile’s efforts to build up its 3G business to date. (previous post) The availability of a wide range of ultra-low-cost TD-SCDMA phones, assuming Spreadtrum can find customers for its new chips, could be just the catalyst that China Mobile needs to breath some new life into its 3G network. Equally important for Spreadtrum, its development of a TD-SCDMA smartphone chip seems to indicate it is also dedicated to the standard’s 4G successor, TD-LTE, which could put it in a strong position to be a big supplier in chips for that standard which is already being tested out in China and a number of other major markets, including Japan and India.

Bottom line: MediaTek and Spreadtrum are looking like strong bets in the cheap smartphone chip market, which should see strong demand from 3G and 4G consumers in emerging markets.

Related postings 相关文章:

◙ Spreadtrum Takes Smart Gamble on China 3G

◙ China Mobile: Poor 3G Approach Yields Weak Results 中移动3G策略不当 拖累公司三季度业绩

◙ Baidu, ZTE Earnings: More of the Same 百度和中兴财报：看上去没变化

Apple Suffers Setback in China Lawsuit Loss 苹果在华商标侵权案初尝苦果

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Apple (Nasdaq: AAPL) may be able to bully big names like Samsung (Seoul: 005930) by suing them in Western courtrooms over intellectual property (IP) infringement claims, but it may find the tactic more difficult to pursue in China, where it has just lost a major trademark lawsuit to a much smaller Taiwanese player. According to domestic media reports, a court in the southern boomtown of Shenzhen has ruled against Apple, the world’s biggest tech company, in a lawsuit it brought against Proview (HKEx: 334) claiming infringement of its iPad trademark. (English article)  The case looks a bit complex, as Proview apparently registered the iPad name all the way back in 2000, well before iPads or even iPhones existed. Apple sued Proview in Britain in 2006 over the matter, claiming the Taiwan company was no longer using the name and thus had lost the rights to it. But clearly the matter was never fully settled, leading to the latest action in Shenzhen. Proview is a relatively big Taiwanese company, but still nowhere near as large as Samsung, which is being sued by Apple in various courts throughout the world over IP infringement allegations related to Samsung’s use of Google’s (Nasdaq: GOOG) Android operating system in its smartphones. Back in September, Apple filed for and received a number of Chinese patents related to its IP and trademarks, leading me to suspect it was planning to bring its “fight them with litigation” approach to China, targeting not only Samsung but also a wide range of domestic handset makers including Lenovo (HKEx: 992) and ZTE (HKEx: 763; Shenzhen: 000063) that also produce models using Android. (previous post) This setback for Apple in Shenzhen shows that the Chinese courts may not be as receptive to Apple’s bullying tactics as some Western courts, which may make the company think twice about its use of litigation as a tool in China for its ongoing global anti-Android drive.

Bottom line: Apple’s loss of a trademark infringement case in Shenzhen means it may have a difficult time bringing its litigious anti-Android campaign to China.

Related postings 相关文章:

◙ Apple Prepares to Bring Anti-Android Drive to China 苹果计划在华反击Android

◙ Apple Prepares to Take on China Pirates 苹果开始接受人民币付款购买应用软件

◙ Apple Overlooks China — Again 苹果再次撇开中国内地市场

US China Bashing Hits New High With Telecoms Probe 华为中兴应巧选时机应对调查

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China-basing has become an unusually major theme in the current US election season, with rhetoric hitting a new high as politicians launch yet another anti-China investigation, this time targeting 2 of the nation’s most prominent exporters, Huawei Technologies and ZTE (HKEx: 763; Shenzhen 000063). Telecoms headlines were buzzing loudly late last week with word of the investigation, which was launched by the Republican-controlled House of Representatives to examine potential threats to national security posed by US-based telecoms networks built by Chinese companies. (English article) This very same concern was put forward by India a couple of years ago, resulting in a temporary ban of the import of Chinese telecoms equipment into the country. After months of talks, which reportedly saw Huawei and ZTE reveal their source codes to the Indian government, both companies were allowed to resume selling their products in the country. Furthermore, if Huawei and ZTE products really do pose such a threat, then most of Europe is now at major risk of Chinese telecoms spying, since telcos in most of its countries now count Huawei and ZTE as 2 of their major telecoms equipment suppliers. Of course, all this talk in the US is nothing new, especially in an election season when politicians have nothing to lose by sounding a tough anti-China note. Politicians in the House of Representatives have already launched anti-dumping probes into Chinese solar cell makers and passed legislation that would punish China as a currency manipulator in the last few months (previous post), and the Obama administration itself also recently denied Huawei permission to bid on contracts to upgrade government-run networks meant for use in emergencies. (previous post) Huawei’s US spokesman took a prudent approach to this latest investigation, saying it was natural for the US to reassure itself of national security on such sensitive matters. If Huawei and ZTE are smart, they will put their US campaigns on hold until after the election and let Beijing issue the periodic statement expressing outrage and disappointment at all the latest unnecessary but politically-motivated anti-China rhetoric.

Bottom line: A new US investigation into security threats posed by Huawei and ZTE is the latest in a string of anti-China campaigns that will continue until the 2012 presidential election.

Related postings 相关文章:

◙ Huawei: Fight Them With Innovation 华为欲借创新论低调进军美国市场

◙ Huawei Undermines US Push With Foolish Request 华为讨要说法很不明智唯有阻碍进军美国市场

◙ Huawei, Lenovo Look to Foreign Advisors in Westward Drive

News Digest: November 18-20, 2011

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The following press releases and media reports about Chinese companies were carried on November 18-20. To view a full article or story, click on the link next to the headline.

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◙ Lawmakers probe Chinese telecoms firms in U.S. (English article)

◙ Apple’s (Nasdaq: AAPL) iTunes App Store Begins Accepting RMB Payment (English article)

◙ New Oriental (NYSE: EDU) Refutes Allegations Made by OLP Global (PRNewswire)

◙ Baidu (Nasdaq: BIDU) Halts B2C Site Lekutian Investment – Source; Lekutian Denies (Chinese article)

◙ China Mobile (HKEx: 941) to Deploy 10-20K TD-LTE Base Stations in H1 2012 (English article)

 

China Mobile’s TD 3G Fading Fast 中国移动3G网络前景黯淡

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China Mobile’s (HKEx: 941; NYSE: CHL) brief chance to generate excitement for its struggling 3G network based on a homegrown technology is rapidly disappearing, with even the networking equipment sellers who once saw big bucks in the technology known as TD-SCDMA now starting to abandon the standard. Chinese media are reporting that the latest round of contracts to expand China Mobile’s struggling 3G network received only lukewarm response from equipment suppliers, who have quietly started raising their prices to help build a network based on the problematic technology. (English article) The reports aren’t much more specific, but the general tone suggests the equipment suppliers, whose ranks include domestic names like Huawei and ZTE (HKEx: 0763; Shenzhen: 000063), as well as global names like Ericsson (Stockholm: ERICb) and Alcatel Lucent (Paris: ALUA), are finally realizing their TD-SCDMA products will have little or no market outside China, even as they spend big money to address problems with the technology that doesn’t have any users besides China Mobile. Similar realizations by Apple (Nasdaq: AAPL) were likely a major factor behind reports last week that its sputtering talks to create an TD-SCDMA iPhone had finally broken down, in another major setback for China Mobile and its 3G network. (previous post) China Mobile has steadily lost share in China’s 3G market due to its poor technology and equally poor roll out of the network, reflecting lack of focus at the company as it prepares for a major leadership change with the upcoming retirement of long-serving Chairman Wang Jianzhou. This latest development seems to indicate that trend will continue for a while still, with China Mobile’s share of the 3G market  — which has already slipped to 42 percent from 45 percent at the beginning of the year – likely to slip further still to a third or even less over the next couple of years.

Bottom line: A cool response by equipment suppliers to China Mobile’s latest 3G network expansion reflects ongoing problems with a network whose share could soon dip below a third.

Related postings 相关文章:

◙ China Mobile: Poor 3G Approach Yields Weak Results 中移动3G策略不当 拖累公司三季度业绩

◙ TD-LTE Hits First Delay, More to Come? TD-LTE技术首次延期 未来还会更多？

◙ China Mobile Shuffle: Sea Change Coming? 中移动高层变动或引发重大变化？