China Tech News

With a total investment of over CNY5 billion, Motorola's global development and quality test center has been positioned within Lenovo's Wuhan operational zone.

This new center will cover various sectors, including manufacturing, operations, management, development testing, trade, and sales. The first batch of Motorola mobile phones is expected to realize volume production in Wuhan in May 2015.

Lenovo plans to transfer the manufacturing of Motorola products to Wuhan base in two phases. During the first phase, Lenovo's existing plant in Wuhan will be responsible for the manufacturing of Motorola products. The company plans to start trial production from May 11, 2015, and the first batch of products will be shipped on June 15. In 2015, the Wuhan base aims at production of 16 million units, including four new Motorola products. Meanwhile, its output value will reach CNY15 billion and export value will reach USD2.4 billion.

During the second phase, Motorola Mobility's global production operating center and global development test center will be established in the Wuhan comprehensive bonded zone, which will cover about 300 mu and is expected to implement initial trial operation in the second half of 2016. The new plant's designed annual capacity is 80 million units and it plans to realize CNY30 billion output value and USD6 billion export value in the 2016 financial year.

On the full completion of the project, the center will add 8,000 to 10,000 industrial and technical employees by the end of 2017.

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Chinese automaker BAIC Motor Corporation and Internet company Letv signed a strategic cooperation agreement in Hong Kong for smart systems, the EUI operating system, and Internet of Vehicles system cooperation.

At present, Letv is establishing its video industry-based smart ecosystem, covering platform, content, terminal, and applications. The company has formed a top research and development team in Silicon Valley with more than 260 people, and many of them reportedly previously worked for Tesla, Mercedes-Benz, BMW, Volkswagen, and Ford.

In January 2015, Letv officially launched its first full terminal smart operating system LeUI in Beijing. LeUI has various editions which can run on automobiles, mobile devices, and TVs. Compared with other car systems, the LeUI auto edition features sidebar design, a simple interface, multi-touch motion sensing, and voice functions. In addition, LeUI integrates other functions like online map navigation and group-based social functions.

BAIC and Letv will launch their first product of cooperation during Shanghai International Automobile Industry Exhibition held in April 2015.

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BMG, a music business subsidiary of Germany's Bertelsmann Group, has signed an exclusive online music distribution agreement for the Chinese market with Alibaba.

Under the agreement, Alibaba will become the exclusive online distributor of BMG music and artists in the Chinese market. Alibaba will sell those products on its own platforms such as Xiami.com. In addition, the Chinese e-commerce group will assume the monitoring responsibilities and take actions for BMG-related infringements in the Chinese market.

For large Internet enterprises in China, entertainment is an important asset to maintain user loyalty and prevent use loss to competitors. But neither Alibaba nor BMG released figures on the expected revenue derived from the venture.

In 2014, Alibaba's major competitor Tencent also formed similar alliance with global music companies. In December 2014, Tencent became the exclusive online distributor for Sony Music Entertainment in mainland China. In November 2014, Tencent signed a distribution agreement with Warner Music.

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Thousands of Chinese websites will soon be marked unsafe by Google's Chrome browser.

Adam Langley, a Google security engineer, says, "On Friday, March 20th, we became aware of unauthorized digital certificates for several Google domains. The certificates were issued by an intermediate certificate authority apparently held by a company called MCS Holdings. This intermediate certificate was issued by CNNIC."

Your web browser knows a website is secure because it trusts the company that issues the secure certificate. But a malicious company can issue a certificate that allows one website to masquerade as another or for a hacker to easily grab confidential information. So Google will be marking any website whose certificate is derived via the China Internet Network Information Center as unsafe. So if a Chinese website has an "https" prefix and ".cn" domain suffix, it will be blocked in the Google Chrome browser.

Langley then says in an update to his original post: "As a result of a joint investigation of the events surrounding this incident by Google and CNNIC, we have decided that the CNNIC Root and EV CAs will no longer be recognized in Google products. This will take effect in a future Chrome update."

This move by Google could be a boon to Chinese technology companies like Qihoo 360, which is itself both a cybersecurity and browser company. Chinese users of Chrome may find it easier to switch to a 360 browser, rather than put up with the hassle of not being able to view domestic Chinese websites.

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Chinese telecom device maker ZTE published its performance report for 2014, stating that its operating revenue reached CNY81.47 billion, a year-on-year increase of 8.3%; its net profit attributable to shareholders was CNY2.63 billion, a year-on-year increase of 94%; and its basic earnings per share were CNY0.77.

ZTE said that the company realized operating revenue of CNY40.58 billion in the domestic Chinese market, accounting for 49.8% of the total operation revenue of the group; meanwhile, its operating revenue in international markets was CNY40.89 billion, accounting for 50.2%.

During 2014, ZTE's wireless products saw a year-on-year sales increase of 20% and its 4G base station market share was over 25% in the global market. In the future, ZTE will continue to invest in 5G. At the latest Mobile World Congress, ZTE displayed the world's first pre-5G Massive MIMO commercial base station.

For mobile devices, ZTE shipped 100 million units in 2014, including 48 million smartphones. Meanwhile, of those smartphones, about 60% were 4G smartphones.

ZTE's research and development expense in 2014 was CNY9 billion, accounting for 11% of its total operating revenue. Statistics from World Intellectual Property Organization showed that ZTE applied for 2,179 patents in 2014.

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Nokia Networks, previously known as Nokia Siemens Networks, announced its adjustments to its global customer operation structure.

The new customer operation were formed by seven major regional markets, including Greater China, effective on April 1, 2015. With the adjustments, Mike Wang has been appointed new Greater China president of Nokia Networks; meanwhile, former Greater China president Markus Borchert has been appointed new European president.

In his new role, Wang will lead Nokia Networks' operation in Greater China, covering sales, business management, delivery, and operations.

Under the new structure, Nokia Networks global customer operation will include seven regional markets: Europe, Greater China, North America, Latin America, India, Asia Pacific, and the Middle East and Africa. Each head of the seven regional markets will report to Ashish Chowdhary, chief operating officer of Nokia Networks.

Wang joined Nokia Taiwan in 1999 as regional general manager of the communications system business unit, leading the operating teams in Taiwan and Hong Kong. Prior to that, he also worked for IBM, ADC Telecom, and Sun Microsystems.

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Chinese online game developer and operator Shanda Games announced that they have signed a final privatization agreement with Capitalhold Limited and its wholly-owned subsidiary Capitalcorp Limited.

According to this final agreement Capitalhold Limited will pay USD3.55 per ordinary share, which is USD7.10 per ADS, to Shanda Games. Calculating by this price, the valuation of Shanda Games will reach about USD1.9 billion.

On the completion of the deal, Shanda Games will integrate with Capitalcorp Limited as a subsidiary of Capitalhold Limited. The transaction is expected to close in the second half of 2015. As the result of the transaction, Shanda Games will be delisted from Nasdaq and become a private company.

On January 24, 2014, Shanda Games announced that they received a privatization proposal from its parent Shanda Interactive Entertainment Limited and a subsidiary of Primavera Capital Group, aiming to acquire Shanda Games for USD6.9 per ADS. In April 2014, Perfect World announced that they would participate in the transaction and agreed to acquire 30.33 million Shanda Games class-A ordinary shares for USD100 million.

However, in September 2014, Perfect World sold out the purchased shares and withdrew from the privatization transaction. After that, Shanda Interactive Entertainment Limited and Primavera Capital Group dropped out from the privatization alliance as well.

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Taiwan's Hon Hai Precision and South Korea's SK C&C, a subsidiary of SK Group, will establish a joint venture to provide information technology services in mainland China.

Hon Hai said that the joint venture will first provide information technology services to Hon Hai's plants in mainland China and offer integrated security systems to other companies in mainland China. According to Hon Hai, the joint venture, which will be formally launched in May 2015, will also explore information technology business opportunities in medical and financial sectors.
At present, Hon Hai owns a 4.9% stake in SK C&C.

To promote enterprise growth, Hon Hai has been developing businesses with lower labor intensity and higher profit over recent years. Prior to the establishment of the joint venture, the group announced a deal to develop smart electric cars along with Tencent and China Harmony Auto. In addition, Hon Hai is making own-branded mobile phone accessories and prepares to provide telecom services in Taiwan.
The joint venture total investment and stake splits were not released.

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Chinese telecom device maker Huawei realized global sales of CNY288.2 billion in 2014, which was about USD46.5 billion, a year-on-year increase of 20.6%.

The company's net profit was CNY27.9 billion, which was about USD4.5 billion, a year-on-year increase of 32.7%.
By business lines, Huawei's carrier business revenue was CNY192.1 billion, a year-on-year increase of 16.4%; its enterprise business revenue was CNY19.4 billion, a year-on-year increase of 27.3%; and its consumer business revenue was CNY75.1 billion, a year-on-year increase of 32.6%.

By regional markets, Huawei's revenue in China was CNY108.9 billion, a year-on-year increase of 31.5%; its revenue in Europe, the Middle East and Africa was CNY101 billion, a year-on-year increase of 20.2%; its revenue in Americas was CNY30.9 billion, a year-on-year increase of 5.1%; and its revenue in Asia Pacific was CNY42.4 billion, a year-on-year increase of 9.6%.

In 2014, Huawei invested CNY40.8 billion in research and development, an increase of 29.4% compared with 2013 and accounted for 14.2% of its total sales in 2014. Over the past ten years, this Chinese company invested over CNY190 billion in R&D.

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Youzu Interactive Co., Ltd, a web and mobile game platform in China, will invest CNY538 million to acquire the entire stake in Guangzhou Zhangtao Network Technology Co., Ltd.

According to the report, Youzu will purchase the 100% stake in Zhangtao Technology from ten sellers by paying cash and newly issued shares.

Youzu said that with the transaction, Youzu aims to enhance gaming product promotion capacity of its listed company and save marketing expenses by using Zhangtao Technology's big data services.

Youzu's chairman and general manager Lin Qi reportedly also owned a 20% stake in Zhangtao Technology; therefore, Lin gained CNY100 million from the transaction. This may send red flags to investors who may not consider it an arm's length transaction.

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