China Tech News

Taiwanese mobile phone chip manufacturer MediaTek saw a performance decline in September 2014, yet achieved a record-high quarterly revenue uptick.

The company's overall operating revenue was NTD57.472 billion, which was about CNY11.6 billion, in the third quarter of 2014, representing record-high quarterly revenue for the history of the company.

The company's latest performance report showed that MediaTek's combined operating revenue decreased to NTD18.545 billion in September 2014, a decrease of 5.65% compared with the previous month; and it was the lowest dip over the past three months.

Disregarding the setback in September, MediaTek realized a large shipment of products like mobile phones, tablets, digital TVs and optical storage products during the third quarter of 2014; meanwhile, the company gained 4G LTE phone chip orders from major clients, including Vodafone, TCL, and Lenovo.

For the entire third quarter, MediaTek achieved combined operating revenue of NTD57.472 billion, completed its expected target of between NTD56.8 billion and NTD61.2 billion. With a quarter-over-quarter increase of 6.16%, the company says it saw record-high quarterly revenue.

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China Mobile and Deutsche Telekom have signed a joint venture agreement to establish an automobile company in China.
With each party holding a 50% stake, the new joint venture will reportedly have registered capital of CNY180 million and the total planning investment will reach CNY270 million.

The joint venture will take advantage of Deutsche Telekom's mature connected car platform and operation experience as well as China Mobile's quality network resources and local business development and operational experience to provide connected car and telematics services to the Chinese market. The joint venture's objective is to provide 4G-based vehicle information services and comfortable, convenient and safe driving experiences to drivers in the Chinese connected car market.

The joint venture will start operation at the beginning of 2015.

Deutsche Telekom is one of the world's leading integrated telecommunications companies with over 142 million mobile customers, 31 million fixed-network lines and more than 17 million broadband lines as of December 31, 2013. The group provides fixed network, mobile communications, Internet and IPTV products and services for consumers and ICT solutions for business customers and corporate customers. Deutsche Telekom is present in around 50 countries and has approximately 229,000 employees worldwide.


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Sony has submitted an application to the Chinese government stating that the company plans to launch the Chinese official version of PS4 at the end of 2014 with expected annual shipments of 200,000 units.

However, the detailed launch time, place, or shipment mode was not disclosed.

Microsoft has already launched Xbox One in China. As its major competitor in the gaming console sector, Sony does not want to fall behind and the company plans to tap the Chinese market with its latest PS4 in December 2014.

An official representative from Sony also confirmed the news. The representative revealed that the company plans to ship 200,000 PS4 consoles annually, but the detailed business plan may still change.

If Sony enters the Chinese market smoothly, it would become the second foreign gaming console company in China following Microsoft. In 2000, China's seven government departments jointly issued a regulation to ban all production and sales of electronic gaming devices and parts targeting the Chinese market.

China's population of 1.25 billion people is a big potential gaming market for Microsoft and Sony. As Japanese gaming manufacturers are moving from consoles to mobile devices, the two companies are eagerly seeking new users.


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Dell announced that the company welcomes the joining of Huang Chenhong as its new president for Greater China.
Huang will lead the Greater China team to provide technical solutions to consumers, small- and medium-sized enterprises, cooperating partners, public organization, and large enterprises.

Amit Midha, Dell's Asia Pacific and Japan president and emerging market chairman, said that Dell realized it must continue having sustainable development in China. Huang's arrival will bring rich experience and deep understanding about how to use Dell's solutions to solve IT challenges for customers. They expect that Huang and his team will further improve the Chinese business of the company.

Before joining Dell, Huang served as global senior vice president and president for greater China at APC under Schneider Electric. He also served as chairman of Uniflair, a subsidiary of APC and worked for other Schneider related companies. Before joining Schneider Electric, Huang was president of Tellabs China. He also worked for Nortel for 17 years.

Huang obtained a Ph.D. in electrical engineering at Texas A&M University in May 1992. Prior to this, he gained his Bachelor's degree in science and Master's degree in electrical engineering from Fudan University in 1983 and 1986. Huang is also reportedly the co-inventor of 13 patents.


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Lenovo plans to increase its Thai market share as it invests an additional USD5 million in Thailand in 2014.

Jeerawut Wongpimonporn, general manager of Lenovo Thailand, said that Lenovo's Asian headquarters has approved this additional budget plan. Of the total investment, USD2 million to USD3 million will be used to expand marketing channels, enhance marketing, and improve operation and management; while the remainder will be used for office maintenance and the creation of a server demonstration center.

Wongpimonporn revealed that Lenovo Thailand currently has three major businesses: PC sales, mobile phones and servers. The company plans to develop new businesses like cloud computing and an ecosystem service in the future.

According to Koh Kong Meng, vice president and general manager of the Lenovo Asia region, holding its server business momentum can help maintain PC market share and improve smartphone and tablet sales. In 2013, Lenovo's server business market value in Southeast Asia reached USD980 million.


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21Vianet and Foxconn have signed a strategic cooperation agreement to establish a joint venture named Smart Time Technologies Limited.

The two parties will jointly build and develop a global supply chain for the Internet data center and cloud computing infrastructure markets. In addition, the companies announced they plan to open a 21Vianet-Foxconn Internet infrastructure and engineering technology research and development center. This development is expected to further strengthen the technological collaboration between the two companies.

The location of the joint venture has not been decided yet — it could be located in Guiyang, Beijing, or Tianjin. Financial terms, including ownership stakes and capitalization requirements, of the JV have not yet been released.

According to Chen Sheng, chairman and chief executive officer of 21Vianet, big data has transformed from a technical concept into an important technology natural resource which supports the development of various industries and a data center is the base of big data hosting, storage, distribution, and future transactions. Over the next two decades, data centers will play a more important role in the development of China. As one of the first Chinese companies to introduce the data outsourcing model, 21Vianet is a qualified partner for Foxconn.

Wu Huifeng, vice president of Foxconn, said that by combining Foxconn's leading cloud computing solutions, cloud servers, storage devices and IDC cabinets and its many global industrial park expertise with 21Vianet's strong experience in IDC operations and rich resources in network infrastructure and customer relationships, they believe the joint venture will facilitate the vertical integration of the IDC value chain and help to build a complete cloud computing eco-system.


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China's Lenovo Group announced the establishment of a new wholly-owned subsidiary aimed at mobile Internet-enabled devices.

This new subsidiary will reportedly start formal operation on April 1, 2015, and it will have an independent company name and a new sub-brand. Chen Xudong, Lenovo Group's China president, will be chief executive officer of the new company.
According to Lenovo, the new company will develop product plans with "Internet thinking" and will deeply involve users in the creation plans. Its new business model will integrate hardware, software, application and Internet services on an end-to-end basis. The new company will focus on using the Internet business model to implement in-depth interaction with consumers in various links, including sales, marketing, and product development.

Yang Yuanqing, chairman and chief executive officer of Lenovo Group, said that mobile Internet, e-commerce and interactive marketing are developing rapidly and they are significantly changing traditional technology business models. The company needs to transform fast and seize new opportunities.

In November 2013, Lenovo established its digital marketing team; in July 2014, the company launched its Internet business platform named Lenovo New Business Development; and in August 2014, the company formally published its Music Fund investment strategy.


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The leaders of Facebook and Apple were in China this past week on separate missions with the same goal: gain better transparency and more access to the Chinese market.

Facebook's Mark Zuckerberg was in Beijing for an event at a local university, and Apple's Tim Cook met with Chinese Vice Premier Ma Kai to review security concerns.

When Facebook's multi-billion-dollar initial public offering launched more than two years ago, details of its prospectus shed light on Facebook's possible entry into China.

In the prospectus, FB said: "China is a large potential market for Facebook, but users are generally restricted from accessing Facebook from China. We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government. It is also possible that governments of one or more other countries may seek to censor content available on our website, restrict access, block our website, or impose other restrictions that may affect the accessibility of Facebook for an extended period of time or indefinitely."

They got that right. Almost 9 years ago (January 26, 2006) ChinaTechNews.com augured in the commentary "Google Is Destined To Fail In China" of that search engine's imminent disaster in China. The company was plagued with problems as far back as a 2003. Google has now partially departed China, and Google is a footnote in the minds of Chinese netizens even though it provides a superior product to homegrown search rival Baidu.com.

Name a single non-Asian Internet company that is doing well in China. Go ahead, name one. You can't think of one because there are none. AOL crashed and burned a few times in China; Yahoo is a boardroom disaster which only did well via its proxy investment in Alibaba; Lycos failed; MSN ekes out space, but not clout, by dint of being a browser default; and Linkedin has received lots of foreign media attention for its China venture, but is still a shallow player in China.

Meanwhile, Twitter, Facebook, Youtube, Vimeo, and other social media cum social networking companies are blocked in China.

Foreign Internet companies are media companies. And China's media is protected, locked, and not open to debate. Social media in China is truly social because the State directs and controls content — social(ism) media has been alive and State-sponsored since 1949.

So Mark Zuckerberg's arrival in China this week is potentially a waste of jet fuel. He's a jester in a court with no sense of humor because no matter how much he tries to endear himself to Chinese netizens and the Chinese government, Zuckerberg's product will continue to be banned in China.

In Facebook's current form, the Chinese ban on Facebook will outlive the company. Facebook will be blocked until Zuckerberg allows censorship along the lines appreciated by the Chinese authorities. Yes, Facebook will be able to sell advertising in China via Chinese-owned advertising agents and its offshore entity in Hong Kong (try getting ad dollars from a Chinese company sent down to Hong Kong!), but the website will never see the grey of day in Beijing.

For Tim Cook and Apple's hacks in China, the company too treads a multi-layered struggle in China. Apple contends with Chinese encryption and privacy standards; Chinese electronics standards; telecommunication company machinations; and normal Chinese retail after-sales woes.

This past week, foreign media reported that Chinese users of Apple's iPhone had possible security failings. Rumors swirled the attacks on the iPhones emanated from the Chinese government, and the Chinese government denied the allegations. Tim Cook (note that his predecessor Steve Jobs never visited China) flew into Beijing immediately to meet with Chinese government officials and take a tour of a Foxconn factory that makes Apple products.

While security and privacy are important to Apple, these concepts are much more important to Apple's users.
Unfortunately, at the same time as Apple possibly pleads with the Chinese government for a wider berth to deploy its secure products, the head of the U.S. Federal Bureau of Investigation is asking Apple and other technology companies to provide weaker security to aid governments.

So this creates a dilemma for Apple, and an opportunity for the Chinese government. Why should the Chinese government give Apple any solace over security worries when the U.S. government is publicly asking for front doors into the smartphones of the world's mobile netizens?

Again, Tim Cook's China trip only gives him some airline mileage, and nothing more. Like Internet media, access to user data is a top security priority for the Chinese government. Asking the Chinese government not to have access to user data is not something that should be broached with so much public scrutiny.

Ultimately, Apple and Facebook will tread different paths. Apple is already popular in China, but its stay is at the pleasure
of the electronics czars. And Facebook will continue to only share with Chinese culture the first syllable of its name: face.


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China Mobile's operating revenue reached CNY481.2 billion during the latest reporting period, a year-on-year increase of 3.9%; but its net profit was CNY82.6 billion, a year-on-year decrease of 9.7%.

At the same time, its earnings before interest, taxes, depreciation and amortization were CNY176.3 billion, a decrease of 5% compared with the same period of last year.

China Mobile said that the Chinese mainland mobile communications sector has reached a high saturation stage and the development of traditional communications services have come to a bottleneck. Meanwhile, the competitive impact from the mobile Internet sector is more obvious. During the first three quarters of 2014, China Mobile's voice and SMS and MMS services continued to decline. The total call time decreased by 0.3% over the same period of last year and the short message usage decreased by 20.2% over last year.

By September 30, 2014, China Mobile's users reached 799 million. Of those, 4G users reached 40.95 million, marking a quarterly increase of 27.01 million and a growth rate of 194%. The number of its 3G users was 244.46 million, a decrease of 5.94 million compared with the previous month. At the same time, its mobile data traffic increased by 98.6% compared with the same period of last year.

China Mobile's report also revealed that due to policy changes, the company's revenue growth further slowed. Its operating revenue increased by 3.9% year-on-year to CNY481.2 billion; while its average revenue per user was CNY63, representing a decrease over last year.

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Chinese B2C e-commerce website JD.com and China Post Group have reached a strategic deal to jointly develop an e-commerce platform targeting cities below third-tier size in China.

With the cooperation, JD.com will provide various products, including PCs, digital products, home and kitchen supplies, and cosmetics, for China Post's "people-benefit project". Those products will reach 13 Chinese provinces such as Hebei, Henan, Shandong, and Hubei via China Post's hundreds of thousands of sites to offer quality e-commerce shopping services to people in small cities and rural areas.

So far, the project of the two parties has been operating for over a month, more than 500,000 China Post employees participated in the promotion of the platform, and the platform has gained over 300,000 new members.

The cooperation aims to improve e-commerce popularity in small Chinese cities. China Post employees will take mobile devices such as smartphones and tablets with them to help people in small cities and rural areas buy what they need via the platform.

A representative from JD's large customer department said that China Post's network coverage and service capacity are precious resources for the development of online-to-offline e-commerce.

Financial terms of the deal were not announced.


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