Narrative: Chinese Expansion
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Alphabet’s Verily Preps for China Entry With Temasek Funds – Bloomberg (Jan 26, 2017)
Verily is one of the most fascinating Other Bets – in some ways, it’s the most completely removed from much of the rest of what Alphabet/Google does, both in terms of its focus and in terms of the business model, which has largely involved partnering with big pharmaceutical firms so far. (We devoted a big chunk of an episode of the Beyond Devices Podcast to Verily a while back, so if you’re interested it’s probably worth a listen – I also wrote a brief summary of my findings here.) Getting outside investment is an interesting way to reduce Alphabet’s exposure to the risks associated with what are rightly called “Bets”, while also potentially allowing these businesses to move faster than they could with Alphabet cash alone, and move into new markets – Temasek is Singaporean, but invests heavily in China. I’m curious to see whether we’ll see this model applied to additional Other Bets, or whether it’s another unique facet of the Verily business which we won’t see repeated elsewhere.
via Bloomberg
Can Huawei Catch Apple and Samsung? – Fortune (Jan 25, 2017)
This piece somewhat acts as if Huawei came out of nowhere into the number 3 spot behind Samsung and Apple in the global smartphone market, and while it’s risen rapidly to the top in individual markets, its global rise has been happening for much longer. It’s been the number three for the last six quarters (likely seven once Q4 2016 is reported on), and has been in the top ten since at least 2011. It may well have crept up on US observers, many of whom don’t tend to focus on emerging markets as much as the US and Western Europe, but this story has been underway for quite some time. Huawei is the big global success story among the ranks of Chinese smartphone vendors, most of whom have done well in China and some emerging markets but less well elsewhere. But Huawei still hasn’t cracked the US, where the carriers I’ve spoken to seem to be reluctant to put a relatively unknown Chinese brand on shelves next to premium products from Apple and Samsung. I don’t think Huawei needs to succeed in the US to be successful, and perhaps not even to catch Apple in raw market share terms, but it’s obviously never going to match Apple in terms of profits.
via Fortune
Hugo Barra is leaving his position as head of international at Xiaomi after 3.5 years – TechCrunch (Jan 23, 2017)
I attended Xiaomi’s press conference at CES earlier this month, and once again the company disappointed by not bringing more of its big products to the US. Although Hugo Barra has been in charge of Xiaomi’s international expansion for three and a half years, it has mostly expanded into other markets like India rather than major mature markets like the US or European countries. Ostensibly, Barra’s reasons for departing now are personal – he misses friends and family in the US, and wants to return there. But I wonder if he’s also been frustrated by Xiaomi’s lack of progress in pushing into some of those big markets. It’s impossible to know who’s been making the final decision on some of those moves – whether Barra or CEO Lei Jun – but not making it into the most high profile markets outside of China as head of international must feel like something of a failure. As with other recent high profile executive moves, it’s tempting to see this as a sign of broader troubles at Xiaomi, and things do seem to have been going poorly there recently, but this is so far something of an isolated case.
via Hugo Barra is leaving his position as head of international at Xiaomi after 3.5 years | TechCrunch (more coverage at Techmeme)
Microsoft Veteran Will Help Run Chinese Search Giant Baidu – Bloomberg (Jan 17, 2017)
Qi Lu was very well respected at Microsoft and throughout the industry, and many were sad to see him step down from his role there due to health reasons a few months back. Now, he’s shown up at Baidu, the Chinese search engine, both to run much of the business but also apparently to spearhead a big push into AI. Given Google’s prominent role in pushing the boundaries of AI here in the US, it’s interesting to see its Chinese counterpart so far behind, and it makes sense that it wants to catch up. A single hire at the top (and one who will be very busy with other things) won’t get them there, but it can certainly demonstrate that Baidu is taking this initiative seriously, and help hire more of the best to assist in the work. The fact that he brings both significant US business and technology experience and Chinese nationality to bear on the role will also help bridge some of the gaps that might otherwise exist.
via Microsoft Veteran Will Help Run Chinese Search Giant Baidu – Bloomberg
Troubled LeEco lands 16.8 billion yuan lifeline after selling stakes in video, movie assets to Sunac China – South China Morning Post (Jan 13, 2017)
Despite its recent launch in the US and a strong presence at CES last week, most of the recent headlines about LeEco have been about its shaky finances rather than its products or services. It looks like it’s now solved at least its short term cash crunch by selling down some of its stakes in various subsidiaries, which should help fund its overseas expansion and particularly its aggressive entry to the US market. From my conversation with LeEco at CES, it appears the focus in the near term will be on expanding distribution channels and content relationships (with more of the latter to be announced very shortly), but until then the value proposition feels pretty thin, and without carrier partnerships all the retail distribution in the world won’t get it far in phones.
Xiaomi stops disclosing annual sales figures as CEO admits the company grew too fast – TechCrunch (Jan 12, 2017)
It’s been apparent for some time that Xiaomi’s early stellar rise was not sustainable, and in 2015 it had to revise its guidance for smartphone sales downward and even then missed it by 10 million. Its business is growing though, including hitting $1 billion in sales in India last year, a strengthening retail business, and good growth in “Internet services”, though those still make up a small minority of sales, for all the talk about Xiaomi as a services company. At this point, Xiaomi is far closer in its model to Amazon than to Google or even Apple in its model – a retail and e-commerce company which sells some of its own hardware and also has a growing services business. But it’s been missing its targets and there’s no clarity about profitability yet at this point. Lots more detail in the CEO letter.
via Xiaomi stops disclosing annual sales figures as CEO admits the company grew too fast | TechCrunch
Alibaba promises Trump it’ll create a million U.S. jobs, but don’t believe it – MarketWatch (Jan 11, 2017)
This is a great bit of analysis on the latest job creation claim from an industrial leader after meeting Donald Trump. In this case, Jennifer Booton points out that Alibaba is talking about indirect job creation in the US through a Chinese-based entity, not employing people in the US directly. But it’s another sign of both he need major tech firms seem to feel to engage with the incoming administration, and their understanding that they can ingratiate themselves with it by talking about job creation. I suspect we’ll see a lot more shaky claims about job creation made by big tech companies in the coming months and years.
via Alibaba promises Trump it’ll create a million U.S. jobs, but don’t believe it – MarketWatch
Baidu’s ‘Little Fish’ home robot could be China’s Echo – The Verge (Jan 5, 2017)
If you live in the US, it’s easy to forget that it’s one of only three countries where Echo is available, along with the UK and Germany. For all the many integrations Alexa is seeing this week at CES, there are many markets Amazon isn’t addressing directly, and China is the biggest. There will therefore be opportunities for other players in the same space in other countries, and Baidu is an obvious candidate in its domestic market.
via Baidu’s ‘Little Fish’ home robot could be China’s Echo – The Verge
Chinese smartphones soar to 51% of India market – Tech in Asia (Jan 4, 2017)
The Indian smartphone market has been characterized by unusually high loyalty to local brands, but that seems to be changing now as Chinese companies start to overcome the resistance to foreign vendors. For now, most of the action is still in the mid tier and below, but this helps erode the idea that one of the reasons Apple hasn’t done well in India is resistance to non-Indian suppliers. Chinese vendors, of course, have already done very well in other emerging markets, but it appears we can now add India to that list too.
via Chinese smartphones soar to 51% of India market – Tech in Asia
LeEco’s new Android-powered smart bikes are coming to the US – The Verge (Jan 3, 2017)
LeEco had a big launch in the US in October, which felt overwhelming but at the same time short on details – many of the products weren’t available yet, weren’t priced, or were described insufficiently to allow observers to evaluate them. In many ways, LeEco has felt like it’s mimicking other big successful ecosystems, but trying to get there very much more quickly, which has been at the root of its financial challenges. These bikes definitely set them apart from the competition, but can also be seen as yet another sign of a lack of focus and excess of ambition.
via LeEco’s new Android-powered smart bikes are coming to the US – The Verge