China Tech News

Former Microsoft Executive Hops To Baidu

Chinese search engine company Baidu announced that Zhang Yaqin, former president of Microsoft Asia Pacific Research and Develop Group, officially joined Baidu as president responsible for leading emerging businesses.
Before joining Baidu, Zhang was Microsoft's global senior vice president and Asia-Pacific Research and Development Group president, leading Microsoft's comprehensive scientific research and product development in Asia Pacific. Zhang joined Microsoft in 1999 and he was a co-founder of Microsoft Research Asia. In 2006, he established the Asia-Pacific Research and Development Group, which integrates various departments and covers basic research, technology implementation, product development, and strategic cooperation.

Robin Li, chairman and chief executive officer of Baidu, said that they welcome Zhang, who has good technical knowledge and rich business experience. Li said he believes that Zhang will make precious contributions for Baidu's development in the emerging business sector.

Zhang said that he is excited to join Baidu during the key turning point of the Internet industry. Baidu has a great vision and development courage. He said the company actively deploys resources in important cutting-edge technical sectors and continues to enhance research and development investments. Zhang said he shares the vision of Baidu and is looking forward to becoming a member of the team.


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Sinopec has signed a framework cooperation agreement with Tencent aimed at cooperation in non-oil businesses.
According to the agreement, Sinopec and Tencent will work together in various sectors, including business development and promotion, mobile payment, media campaigns, O2O businesses, map navigation, user loyalty management, big data application, and cross-marketing. Financial terms of the deal were not announced.

Fu Chengyu, chairman of Sinopec Sales Company, previously said at the company's semi-annual performance meeting that the company will actively explore the potential of non-oil businesses and will focus on emerging businesses such as convenience stores, automobile service centers, O2O areas, financial services, environmental products, and advertising. The company would establish a new business model and gradually transfer from an oil supplier to a comprehensive service provider.

Sinopec has opened 23,000 convenience stores, serving 2,000 customers every day. In 2013, the company's turnover of non-oil products reached CNY13.3 billion and it is expected to be over CNY15 billion in 2014.
Sinopec's retail and e-commerce affiliate already implemented similar deals with Rt-mart, SF Express, and Yhd.com.


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Terry Gou, chairman of Hon Hai Group, announced that the company will invest over CNY5 billion in Shanxi to develop the electric car industry.

Gou revealed that in 2014, Foxconn's output in Shanxi will surpass CNY60 billion and the company already has 100,000 employees in this province. The company is expected to invest over CNY5 billion in Shanxi to develop the electric car industry by using the province's rich energy resources.

Hon Hai has been deploying resources towards the electric car sector for many years and has achieved decent results in batteries. The group has been supplying auto parts for the American electric car maker Tesla.
Gou previously said at a shareholders' meeting that the electric car is a popular subject and Hon Hai's products will feature prices below USD15,000. The investment in Shanxi is considered a key move to realize the low-price electric car strategy.

Reportedly a son of Shanxi, Gou has invested in the province for over ten years and Foxconn has two factories in Taiyuan and Jincheng, respectively. The one in Taiyuan mainly produces high-end smartphones and accessories; while the one in Jincheng manufactures industrial robots, automation devices, precision tools and dies, and optical lens.


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Microsoft has established a new wholly-owned subsidiary in Shanghai named Microsoft Asia-Pacific Technology Limited, which will focus on the global research and development of the Microsoft cloud operating system.

The wholly-owned subsidiary is based around the Chinese teams of Microsoft cloud computing and corporate departments. It will mainly focus on the global development of Microsoft's cloud operating system, covering Microsoft Azure, Windows Server, SQL Server, payment platforms, and development tools.

Scott Guthrie, Microsoft's global executive vice president, said that the establishment of the new company represents Microsoft's belief in building a world-class research and innovation center and business center in China.

In addition, Microsoft announced that Shen Yuanqing, chief operating officer of Microsoft Asia-Pacific Research and Development Group, will take the role of managing director of Microsoft Asia-Pacific Technology Limited concurrently.
Capitalization details and specific legal scope of business for the new company are not yet available.


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Media have been opining and hyping Alibaba's USD21.8 billion IPO impact on the global Internet ecosystem and how the company plans to invest its new wealth.

Unlike most IPOs, many early investors in Alibaba will have no lock-up period and they can sell their shares today. Though CEO Jack Ma pledged that customers are more important than investors to Alibaba's growth, this uncommon nod towards investors may instead be a bellwether to how insiders view Alibaba's future. If those investors sell on the first day, it may solidify the Chinese technology insider rumors over recent years that Alibaba fears a slowdown of its growth in China. This IPO may then just be an exit for those investors who feared future losses if the company remained private.

So with a China slowdown, the company is expected to seek growth overseas in places like Brazil, Southeast Asia, and Eastern Europe. Startups and mature companies are said to be eager to grab some of Alibaba's new wealth. But how does the hype translate into profit for Alibaba?

There was hype in the late 1990s when Chinadotcom went public, then sank. There was hype and hope when China's top Web portals Sina.com, Sohu.com, and Netease.com listed, followed quickly by Netease.com's near-suicide and delisting — and the subsequent hush over the industry. Then there was hype for the wireless value-added service companies in China listed in the United States who rose on Western dreams, and crashed on Chinese regulations. And now there is Alibaba, who again is expected to replicate its success in China around the world.

Alibaba most likely will be able to globally grow through acquisitions, but its focus will and should still remain on China. While rumors swirl that its B2B Alibaba.com business is slowing, the company is doing well with its B2C Taobao.com business. And there is enough room in the market for Chinese competitors like JD.com to grow with Taobao.com. Alibaba is the powerhouse in Greater China for e-commerce, and it has honed its customer-centric mantra through years of tests and victories.

But perhaps the biggest strength for Alibaba is not part of the Cayman Island company that is listing in New York. Alipay.com is Alibaba's online payment service and it was recently separated away from Alibaba Group and now operates as a separate, independent business that has no direct impact on Alibaba's bottom line. Like China UnionPay's ventures into foreign markets, Alipay may become Alibaba's first true international business. It's unfortunate that Alibaba investors do not directly benefit.

A few weeks ago, Amazon.com announced plans to begin operations in Shanghai's new free trade zone to allow Chinese exporters easier access to global customers. Alibaba can do the same thing, but if it expects to truly dominate the entire supply chain, it could purchase a global logistics and courier company like DHL, Fedex, or UPS.

Or maybe Alibaba takes a different route, and instead focuses on global retailing strength. Could it purchase a chain of convenience stores? Alibaba already partners with many Greater Chinese retail operators to use the outlets as drop-off points for delivery of goods to customers.

But what if it changes strategy altogether? Instead of focusing on trade of physical goods, what if Alibaba focuses on digital consumption? Alibaba could ramp-up its focus on online entertainment investments, and maybe even focus more on business media assets. Maybe Alibaba even gets involved in cryptocurrency like Bitcoin, or invents its own Alicoin competitor.

Ultimately, Alibaba now has enough cash to pursue many of these ideas in tandem, but it must juggle those plans with the corporate governance headaches of being a Chinese publicly-listed overseas firm. Today's big payday comes with lots of hope and many more opportunities.


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Chinese telecom device maker Huawei opened a new research and development organization in Southern France.
Located at Sophia Antipolis, this new R&D unit currently has 20 engineers and it will add ten more engineers by the end of 2014. Most of those engineers previous worked for Texas Instruments.

According to Huawei, Sophia Antipolis has a good information technology ecosystem and a large number of senior engineers who have rich experiences in electronic devices and software, which are the major reasons for Huawei to build the R&D unit there. At present, Huawei has 17 R&D units in eight European countries, including Belgium, Finland, Ireland and Sweden.
Huawei revealed that the company started operating in France from 2003 and the company announced in 2013 that they planned to recruit 170 researchers in the country by 2017. Huawei also said that they will invest GBP125 million, which is about USD203.3 million to build a new R&D center in Bristol, Britain. Huawei currently has a R&D unit in Britain's Ipswich. By 2017, Huawei plans to hire 300 employees for those two R&D units in Britain, so as to realize its goal of creating 5,500 jobs in Europe.

In addition, Huawei launched a new innovation center in Walldorf, Germany, in August 2014, which focusing on development of integrated products.


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Aisidi (HK) Limited has signed a three-party agreement with Xiaomi Singapore and Flipkart India Private Limited to sell Chinese Xiaomi smartphones in India.

According to the agreement, the three parties will reportedly work together to promote the sale of Xiaomi smartphones in India as well as the development of other emerging smartphone markets. The contents of this agreement include but are not limited to the sale of Xiaomi smartphones in India, supply chain logistics services, funding platform services, and a sales target of USD200 million for 2014.

Flipkart India is a leading e-commerce company in the local market and it provides over 15 million products of more than 70 categories. Founded in 2007, the company currently has 22 million registered users and over four million average daily visits. With complete technologies, the company ensures the shipment of five million items on a monthly basis, and it also provides various innovative services such as cash-on-delivery and a 30-day return policy.

Xiaomi Singapore is the sales and support center for Xiaomi's overseas expansion. It is mainly responsible for the sale and support of smartphones and consumer electronic products.

Registered in Hong Kong on November 6, 2013, Aisidi Hong Kong is the wholly-owned subsidiary of Shenzhen Aisidi and the company focuses on realizing the international strategic development goals for Aisidi.


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China's X86 server shipments reached 448,000 units, a year-on-year increase of 22.2%; and its server sales reached USD1.43 billion, a year-on-year increase of 34.6%, according to latest statistics from IDC.

Statistics from IDC showed that during the second quarter of 2014, the global shipment of X86 servers increased by 1.5% year-on-year to 2.2 million units; while the related sales increased by 7.8% year-on-year to USD9.8 billion. Of that total, China's shipment of X86 servers increased by 22.2% to 448,000 units and its related sales increased by 34.6% to USD1.43 billion, making the Chinese market a growth highlight among the world's server markets.

Statistics also revealed that the Chinese server manufacturer Inspur achieved the fastest shipment growth of 69% and it contributed a major part of the market growth. Its market share reportedly exceeded IBM, HP, Lenovo and Huawei, and the company continued to lead with a triple growth rate.

By product form, the rack server was still the mainstream product in the Chinese market and it was the strongest driver of growth. During the second quarter of 2014, the sales and shipment of rack servers increased by 43% and 34.4%, respectively.

By industrial markets, the Internet sector was the largest industrial market and it promoted the growth of overall markets. Large Internet operators like Alibaba and Qihoo continued to develop their cloud computing, gaming and search businesses, which created strong demand for servers. Meanwhile, medium and small operators such as JD.com, Yhd.com, and Cntv.cn also enlarged their procurements.

IDC said that in 2014, the server market began to recover from the weak situation of 2013. In the second half of the year, traditional industries, including government, finance, telecommunications, and manufacturing, will will help the server market maintain stable growth.


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Xueqiu.com, a Chinese social investment website, has completed its third round of financing of USD40 million with investors including Renren.com and Morningside Ventures.

Xueqiu's products include its website and an application for smart devices. Officially launched in November 2011, Xueqiu has been providing data inquiries, information, and interactive communications services to Chinese investors. Its services cover various categories such as stocks, funds, and bonds. Prior to this, the company already gained investments from Sequoia Capital and Morningside Ventures.

Commenting on the investment, Chen Yizhou, chairman and chief executive officer of Renren group, said that the most important thing about Internet finance and investment is quality users with investment judgment and Xueqiu has such users. The reason for investing in Xueqiu is that the company has good development prospects and potential and Renren believes the community products will create huge value.

Fang Sanwen, founder of Xueqiu said that with great efforts, Xueqiu has established its position in the investor communication service market. Fang said when communication integrates with transactions, the value of community will increase. After the new round of financing, Xueqiu will promote that integration.


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Chinese technology company Lenovo announced a new cloud computing program during its enterprise business strategy and ThinkServer Gen5 launch meeting.

The company also published its self-developed cloud platform management solution named ThinkCloud.
Gerry Smith, Lenovo Group's executive vice president, head of enterprise and head of Lenovo's North America operations, said that apart from PC, enterprise business is another major profit contributor for Lenovo. By acquiring IBM's X86 server business, Lenovo aims at the top of the global server market.

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Adobe has decided to close its research and development branch in China and all related operations will be terminated at the end of December 2014.

Adobe China's public relations company confirmed that after the Chinese R&D branch stops operating, the Chinese business will be transferred to Adobe India. However, Adobe will maintain its sales businesses in Shanghai, Beijing, Guangzhou, Shenzhen, Hong Kong and Taiwan.

According to media reports, Adobe's 400 employees in China are divided into five groups and each group will get an envelope of a different color. Those who receive green ones will be the first to leave the company and the estimated departure time is the end of October; and those who get red ones will leave the company at the end of December. Sales representatives will get white envelopes and the sales department is the only department that survives the company closure.

In addition, about 30 employees will be transferred to Adobe's American headquarters or Indian branch. For pregnant employees, the company has special compensation rules since it is difficult in China to dismiss employees during pregnancy.

Adobe's report for the third financial quarter ended August 29, 2014, showed that the company's operating revenue was USD1.01 billion, a slight increase of 1% over the same period of 2013 and failed to meet expectations. Its net profit was USD44.7 million, a significant decrease of 46% compared with the USD83 million in the same period of last year.


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Chinese tourism website Woqu.com recently confirmed that the company gained USD20 million investment during its second round of financing.

The investment was led by Tencent and followed by Morningside Ventures.

Founded by former Mangocity president Huang Zhiwen in October 2013, Woqu.com focuses on the American independent travel market. The website was officially launched in April 2014 and its products include American hotels, car rentals, pick-up services, local tours, visas, insurance, and phone cards.

Huang explained that they are attracted by the large tourist numbers potentially visiting North America. In 2012, about 1.4 million Chinese tourists visited America; in 2013, the number was 1.78 million; and in 2014, the number is expected to be over two million. It is a fast-growing market and it can help the start-up company to avoid competition with industry giants by focusing on the American independent travel market.

The company plans to develop a standard model in this marketplace and copy it to other destination countries.
According to Woqu.com, the company may enhance both mobile sectors and the multi-destination independent travel market after this second round of financing.


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Chinese telecom device maker Huawei acquired Neul, a Britain-headquartered Internet of Things technology provider, for USD25 million.

As a company focusing on the research and development of Internet of Things technologies and products, Neul is known for its "Weightless" platform, which offers super-low energy consumption air interfaces for products like smart testers and street lights. It is a new wide-area wireless networking technology designed specifically for the Internet of Things, achieving coverage, battery life, module cost and efficiency goals that far out-reach today's GPRS, 3G, CDMA and LTE WAN solutions.

Huawei recently enhanced its investments in the British Internet of Things industry. The company previously invested USD125 million in the construction of a chip development lab in Bristol and they also promised that the company would make USD1.3 billion local investments in Britain.

The acquisition is a good deal for Neul, which will be able to take advantage of Huawei's resources to become a leading company in the Internet of Things sector; on the other hand, Huawei will benefit from the investment, which help the Chinese company gain an emerging technology with small costs in a foreign land.


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American electric car maker Tesla has entered the Chengdu market and reportedly delivered its products to consumers in the city.

The company also launched its first super charger facility in Chengdu, which is the company's 17th in China. Tesla's service center in Chengdu will reportedly become the company's first service center in the southwestern region of mainland China.
In April 2014, Tesla officially entered the Chinese market and delivered the first batch of cars to users in Beijing and Shanghai. In July, the company set up service centers in Hangzhou and Shenzhen, and delivered products to local consumers.

So far the company has four stores in Beijing, Shanghai, Shenzhen and Hangzhou, respectively; and it established six service centers in total in Beijing, Shanghai, Hangzhou, Shenzhen, and Chengdu. Tesla has built 17 super chargers in mainland China, located in Beijing, Shanghai, Nanjing, Hangzhou, Shenzhen, Chongqing, and Chengdu. The company aims to deploy over 380 destination chargers in 55 cities and regions across China and it will set up service centers in cities like Xi'an and Wuhan before the end of the year.

Jerome Guillen, Tesla's vice president for global sales and service, said during an interview that they track the market demand and build retail stores and service centers accordingly. In 2013, Tesla delivered 20,000 Model S cars and they plan to deliver 35,000 in 2014.

Apart from cooperating with China Unicom to deploy chargers in 400 China Unicom business halls, Tesla will also team with individuals to expand the destination charger network.


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Here is an interesting piece of news that may or may not make HTC fans happy. Apparently, Chinese electronics giant TCL has eyed HTC for its next major acquisition.

We’re not sure how serious TCL’s intentions are, but the Chinese company acquired Alcatel back in 2011 and provided the mobile division with enough resources to put it on the floating line.

After a few years of losses before being acquired by TCL, Alcatel has been profitable for the first time soon after it was operating under the Chinese company’s umbrella. To this day, Alcatel is providing enough profit for TCL to be considered a successful acquisition.

The next smartphone maker on TCL’s shopping list could be HTC. GSMDome reports Chinese blog site SCMP cites TCL’s Chairman Li Dongsheng who said in a short statement on Weibo that he admires HTC co-founder and chairman Cher Wang and that he wished their companies could join forces to better compete with Apple.

Here is the Google translation, which definitely sounds weird, but those who know Chinese can read the original statement as well:

“Although the return of the HTC Cher Wang year's time, but it was not like Steve Jobs like this brand back to life. HTC Dopod era from the beginning, has been insisting on the development direction of smart phones, and Apple at the same time he set foot in this industry.

HTC is my great admiration for the enterprise, with the Chinese mobile phone manufacturers, I hope HTC in the mobile device market can be occupied his position, on both sides of the Chinese and South Korean companies join forces to compete with Apple.”

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China Huaxin Post & Telecommunication Economy Development Center formally announced that the company has completed the acquisition of Alcatel-Lucent Enterprise, a subsidiary of Alcatel-Lucent.

China Huaxin and Alcatel-Lucent have jointly established a controlling company, which will be responsible for the global operation of Alcatel-Lucent's enterprise business. China Huaxin holds a 85% stake in the joint venture, while Alcatel-Lucent owns the remaining 15% stake.

After the acquisition, Alcatel-Lucent Enterprise will continue to enhance its existing advantages in the enterprise communications sector; meanwhile, it will explore new business opportunities in high-growth regions, industrial solutions, and cloud services. The newly established controlling company will be committed to leading the development of next-generation enterprise communication and promoting the innovation of business models to transfer from a technology-oriented model to a customer experience-oriented model, so as to benefit its customers and partners.

Alcatel-Lucent Enterprise is a world leader in communications and networking solutions. Headquartered in Paris, France, the company has over 2,700 employees worldwide and its businesses reach more than 80 countries and regions.
China Huaxin Post & Telecommunication Economy Development Center is an industrial investment company that seeks long-term commercial growth opportunities in the information and communications technologies sector.


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Chinese technology company Inspur and American open source manufacturer Red Hat have reached a strategic deal to combine Red Hat's latest-generation enterprise operating system Red Hat Enterprise Linux 7 with Inspur's X86 platform products.

According to the agreement, Inspur and Red Hat will become OEM partners. The OEM partner designation is the highest partner rank for Red Hat and Inspur will enjoy the best prices and the highest priority technical support. Other financial terms of the deal were not released.

As the first step of the cooperation, Red Hat will provide full technical and service support to Inspur's nine kinds of X86 computing products; in return, Inspur will preferentially recommend Red Hat Enterprise Linux 7 operating system to its users. In the future, the two parties will cooperate in cloud computing, big data, storage and virtualization services.

The Chinese market is currently the growth highlight of the global server market. Statistics released by the market research firm Gartner showed that in the first quarter of 2014, Inspur had 19% market share in the server market, ranking first in China and fifth in the global market. With a year-on-year increase of 288%, the Chinese company was reportedly the fastest-growing manufacture in the world. Red Hat has been leading the open source sector and its Red Hat Enterprise Linux has been a leading enterprise operating system since its launch over ten years ago. At present, over 90% of Fortune Global 500 companies are using the enterprise Linux solutions provided by Red Hat.

Scott Musson, Red Hat's vice president of global strategic alliance, said at the signing ceremony that the company hopes that the cooperation with Inspur will enhance Red Hat's business expansion in the Chinese market and reinforce the use of Linux operating system in China.

Hu Leijun, vice president of Inspur Group, said that Inspur and Red Hat have reached accreditation cooperation for the enterprise Linux operating system level. The two parties plan to form an in-depth partnership in cloud computing, critical computing, virtualization, and big data in the future to fully meet customer demands.


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China's Lenovo Group and Japan's NEC agreed to extend their joint venture agreement through 2026.

The agreement signed by the two parties included amendments to the initial transaction. Amendments to the NEC brand license agreements stated that the parties to the NEC brand license agreements entered into the NEC brand license amendment agreements on October 7, 2014, to extend the terms of the NEC brand license agreements for two more years to June 30, 2018.

Headquartered in Tokyo, NEC's businesses cover information technology solutions, network solutions, and electronic devices. On January 27, 2011, Lenovo and NEC announced the joint venture agreement, under which the two parties established a PC joint venture that sells NEC-branded PCs and tablets in the Japanese market through its subsidiary. The initial agreement had a 5-year term lasting through June 2016. Lenovo BV owns a 51% stake in the JV, while NEC owns the remaining 49%.

In addition, pursuant to the business combination agreement, Lenovo BV granted NEC a put option to require Lenovo BV to purchase all of the NEC JV ordinary shares from NEC and NEC granted Lenovo BV a call option to require NEC to sell all of the NEC JV ordinary shares to Lenovo BV. The original put option and the original call option are exercisable at any time after July 1, 2016, or within three months of certain trigger events set out in the business combination agreement with respect to all of the NEC JV ordinary shares.

Prior to this, Lenovo chief executive officer Yang Yuanqing revealed that if acquiring NEC, Lenovo would return to a top three PC maker in the world.

So far, Lenovo has implemented several acquisitions. The Chinese company previously announced the completion of acquisition of IBM x86 server business. Earlier than that, the company invested USD2.9 billion in the acquisition of Motorola Mobility to deploy in the mobile Internet sector and it invested USD100 million in the acquisition of Unwired Planet, which owns 3G, LTE and other important mobile patents.


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Taiwan-listed gaming company XPEC Entertainment plans to invest NTD5.34 billion, which is about CNY1.068 billion, to acquire the entire stake of the mainland mobile game platform Tongbu Technology Limited.

According to reports in Taiwanese local media, XPEC will hold a shareholder meeting in November 2014 to discuss the acquisition, which will then be reviewed by the Taiwanese government. The deal is expected to be closed in the first half of 2015.

As a result of the acquisition, Tongbu Technology will establish a development and research center in Taiwan to implement application development related to the mobile Internet. In the future, the company will integrate XPEC's game development capacity with its game user database to improve XPEC's mobile game penetration in mainland China.

Prior to this, XPEC also acquired a 90% stake in Tiny Piece, a global leading mobile casual game platform.
Founded in Taipei in August 2000, XPEC Entertainment is one of the many game developers in greater China and has developed well-known titles for console and PC online and mobile platforms. It has branches in Taipei, Shanghai, Suzhou, and Beijing, with more than 850 employees.


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Chinese home appliances and electronics retailer Gome announced that the company's first owned store will be launched in Mong Kok, Hong Kong, this week.

Mong Kok has been one of the sites in recent weeks of protests in Hong Kong for freer elections.
Wang Junzhou, general manager of Gome, did not make any statement about the protest's impact on the store opening and he told local Chinese media that the positioning of the Gome Hong Kong store is as an international store instead of store of domestic products. For a certain period of time, Gome Hong Kong store's main products will be foreign-branded digital and audio-visual products. Wang also pointed out that as for Chinese brands, Gome will focus on those that have already entered the Hong Kong market such as Haier and Midea.
The new Gome Hong Kong store will have an area of 25,000 square feet. With the new store, Gome aims to seize a 30% market share in the Hong Kong home appliances market in two to three years. Meanwhile, the company plans to open at least three stores in the same period, with individual store annual sales of CNY1 billion.

As a major competitor of Gome, Suning has developed 27 chain stores in Hong Kong. During the first half of 2014, Suning's sales in Hong Kong reached CNY4 billion and its annual sales target is CNY10 billion.


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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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Hugo Barra, global vice president of Xiaomi, recently issued a statement that claims Xiaomi is moving its international user data from servers in Beijing to U.S. and Singapore.

This is reportedly a response to previous incidents which exposed that Xiaomi smartphones automatically returned global user data to Beijing servers. Chinese telecommunications regulations require Chinese companies to store domestic data on local Chinese servers.

Is this move by Barra enough to quell security and privacy concerns that a Chinese mobile phone company may be in cahoots with the Chinese government for harvesting global user data?

According to Barra the international user data migration aims to improve experience of users all over the world, cut down latency and reduce failure rates. At the same time, it will help the company maintain high privacy standards and comply with local data protection regulations.

Based on Xiaomi's plans, the company will first migrate their global e-commerce platforms and user data for all international users from Beijing data centers to Amazon AWS data centers in California, U.S. and Singapore, which is expected to be completed at the end of October 2014. It will benefit users in all international markets, including Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, and Taiwan.

For the second step, Xiaomi will migrate their MIUI services and corresponding data for all international users from Beijing data centers to Amazon AWS data centers in Oregon, U.S. and Singapore, realizing the migration of Mi account, cloud messaging and Mi cloud services. The migration is expected to be completed at the end of 2014.

Finally, Xiaomi plans to improve user experience in emerging markets such as India and Brazil in 2015. Due to the lack of Amazon AWS services in those markets, Xiaomi will cooperate with local data center providers.


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Chinese telecom operator China Unicom announced its financial report for the first three quarters of 2014, stating that by September 30 its operating revenue reached CNY215.34 billion, a year-on-year increase of 5.3%; while its net profit reached CNY10.56 billion, a year-on-year increase of 36.1%.

For the mobile sector, China Unicom's revenue during the reporting period was CNY119.1 billion, the number of its mobile users reached 297.07 million, and its average revenue per user was CNY45.5. Meanwhile, its mobile broadband service revenue was CNY80.36 billion, a year-on-year increase of 24.3%, the number of mobile broadband users reached 145.71 million, and the average revenue per user was CNY65.7.

In the fixed-line broadband sector, China Unicom's revenue in the first nine months of 2014 was CNY66.92 billion. Of that, fixed-line broadband service revenue increased by 9.7% year-on-year CNY37.52 billion, accounting for 56.1% of the total fixed-line business service revenue, the number of fixed-line broadband users reached 68.482 million, and the average revenue per user was CNY62.4.

From January to September 2014, China Unicom's costs were CNY201.27 billion, a decrease of 3.7% compared with the same period of last year. For details, the company's asset depreciation and amortization was CNY55.14 billion, a year-on-year increase of 8%; its network, operation, and support costs were CNY27.77 billion, a year-on-year increase of 12.6%; its sales expense was CNY31.79 billion, a year-on-year decrease of 0.3%; and its mobile broadband business interruption subsidies were CNY3.91 billion, a year-on-year decrease of 32.7%.

Due to the change of Chinese inter-network settlement policies, China Unicom's inter-network settlement costs decreased by 26.1% year-on-year to CNY11.12 billion.

China Unicom's pre-tax profit was CNY14.07 billion and its net profit was CNY10.56 billion, representing a year-on-year increase of 36.1%. The company's earnings per share were CNY0.443 and its earnings before interest, tax, depreciation and amortization were CNY72 billion, a year-on-year increase of 12.5%.


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Chen Yizhou, chief executive officer of Renren, says the company is planning to sell some non-core businesses to improve their profitability and they are also considering investment and expansion opportunities in America and Hong Kong.
Chen revealed during an interview with local Chinese media that under the current model it is hard for the company to make any profit. They will therefore implement a complete transformation and change their business model.

Renren was once known as the Facebook of China. Founded in 2005 in its present incarnation, the Chinese company has already been listed on the New York Stock Exchange. The company took a typical Chinese Internet company path of developing diversified operations, covering online games, online video, e-commerce, group buying, and social networking.
Though the company claims to have 214 million monthly active users by June 30, 2014, they never achieved stable profit. In the second quarter of 2014, Renren realized net profit of USD31.3 million. However, its operating revenue was only USD25 million and its earnings of USD86 million were from short-term investments. The company suffered operating losses of USD30.4 million during the reporting period.

The third quarter is even worse. Renren predicted that its operating revenue will decrease to between USD19 million and USD21 million. Chen attributed the situation to the severe competition from Tencent and other Chinese Internet companies.

Chen refused to disclose which business the company plans to dump. Prior to this, Renren sold its e-commerce business to Baidu in August 2013. With exception of its social networking core business, Renren holds an open attitude towards cooperation with large technology companies.


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Alibaba Group's chairman Jack Ma and Apple's chief executive officer Tim Cook jointly announced last week that Alibaba and Apple will work together on payment services.

Apple Pay plans to enter the Chinese market via Alipay and become a payment method for Chinese Apple users. But more importantly, Apple will help Alipay to expand into the international market.

In the future, major U.S. department stores like Kohls, Macys and Dillards will be able to support payment via Alipay. In addition, those three department store companies will become the import partners of Alibaba to provide products to Chinese consumers through channels on Alibaba.

Ma revealed during the announcement that imports of goods will be an important part of Alibaba's overseas strategy and China can import a lot of things from America.

In mid-October, Alibaba announced a strategic deal with Costco. With the cooperation, Costco will open a flagship store on Tmall.com, Alibaba's B2C e-commerce site, and provide Chinese consumers with food and health products.
Financial terms of the Apple and Alibaba deal were not released.

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Alibaba Group Holding Limited says its revenue grew as it announced its financial results for the quarter ended September 30, 2014.

The e-commerce company's revenue increased to USD2.74 billion in the quarter ended September 30, 2014, up nearly 54% year on year. Mobile revenue increased by 1,020.2% year on year to USD606 million in the quarter ended September 30, 2014.

China retail marketplaces had 307 million annual active buyers in the twelve months ended September 30, 2014, compared to 279 million in the twelve months ended June 30, 2014, and 202 million in the twelve months ended September 30, 2013, representing an increase of 52.0% compared to the same period in 2013.

Income from operations in the quarter ended September 30, 2014, was USD708 million, or 25.8% of revenue, a decrease of 17.2% in the same quarter of 2013. The decrease was primarily due to share-based compensation charges and an increase in amortization of Alibaba's intangible assets.

Alibaba's net income in the quarter ended September 30, 2014, was USD494 million, a decrease of 38.6% compared to the same quarter of 2013. The decrease was primarily due to the same share-based compensation charges and increased amortization expense, and an increase in the company's effective tax rate.

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Chinese Bitcoin exchange website BTCChina has reached a strategic deal with e-commerce providers, including online game service provider Shenzhoufu.com; Internet P2F financial management website Aicaike.com; and maternal and child product retail website Dandanchina.com.

According to the agreements, BTCChina will provide Bitcoin payment services to those e-commerce enterprises, which expand payment channels for Internet users, help e-commerce enterprises attract more users, and improve their competitiveness.

Bobby Lee, chief executive officer of BTCChina, said that they are honored to cooperate with those well-known e-commerce providers to jointly expand the payment sector. Payment channels are crucial for e-commerce companies and as a supplement of traditional currencies, Bitcoin has attracted wide attention on the Internet. The introduction of Bitcoin is expected to attract new user groups for those e-commerce websites.

In addition, BTCChina's services can also support cross-border payments, which will help Chinese e-commerce websites to attract overseas customers and vendors and expand overseas markets.

By June 2014, there were 63,000 physical stores and websites that accepted Bitcoin payment, including well-known brands like Dell and Neweggs. The world's leading Internet payment company Paypal also announced on September 23, 2014, that the company has accepted Bitcoin payments and users can purchase digital content such as games, music, videos and news with Bitcoin.


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Lenovo and Google jointly announced that Lenovo formally completed its acquisition of Motorola Mobility from Google, and this now makes Lenovo the third largest smartphone maker in the world.

Yang Yuanqing, chairman and chief executive officer of Lenovo Group, said that while enhancing the company position as the third largest smartphone maker in the world, Lenovo will challenge the top two competitors.

After the acquisition, Lenovo will operate Motorola as a wholly-owned subsidiary and the latter's headquarters will remain in Chicago. On the completion of the acquisition, Lenovo welcomes the addition of nearly 3,500 employees around the world, including about 2,800 in the U.S., who design, engineer, sell and support Motorola's devices, which are now considered "Chinese devices".

The total purchase price of the transaction is about USD2.91 billion, including approximately USD660 million in cash and 519,107,215 newly issued ordinary shares of Lenovo stock, with an aggregate value of USD750 million, representing about 4.7% of Lenovo's shares outstanding, which were transferred to Google at close. The remaining USD1.5 billion will be paid to Google in the form of a three-year promissory note. In addition, a separate cash compensation of about USD228 million was paid by Lenovo to Google primarily for the cash and working capital held by Motorola at the time of close.

Commenting on the acquisition, Yang said that they achieved a historic milestone for Lenovo and for Motorola. Lenovo has a clear strategy, great global scale, and proven operational excellence; while Motorola brings a strong presence in the U.S. and other mature markets, great carrier relationships, an iconic brand, a strong intellectual property portfolio and an incredibly talented team.

Google's chief executive officer Larry Page said that Motorola is in great hands with Lenovo, a company that is all-in on making great devices.

The transaction has satisfied all regulatory requirements and customary closing conditions, including clearance by competition authorities in the U.S., China, EU, Brazil and Mexico, and by the Committee on Foreign Investment in the United States.


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Lei Jun, chairman and chief executive officer of Chinese smartphone maker Xiaomi, says the company will invest USD1 billion in the video content industry as it aims to improve content of its TV and TV box products.

For content, Lei said they prefer to cooperate with partners in the video content sector and realize joint growth in the area.

Lei said the most important thing for Xiaomi in the current stage is the integration and operation of video content. The company aims to establish a complete network which closely combines software, hardware and contents to enhance the competitiveness of the company.

At the same time, Xiaomi announced that Chen Tong, former executive vice president and chief editor of Sina.com, has joined Xiaomi as vice president, leading content investment and content operation.

Xiaomi is rumored to be raising a new round of funds, which could evaluate the company to about USD50 billion. This new round of financing negotiation is reportedly at its early stage and no substantive agreement has been achieved yet. In addition, DST Systems, an existing shareholder of Xiaomi, may participate in the new financing.

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China's biggest e-commerce company claims more than USD1 billion worth of goods were sold over its sites within the first 20 minutes of this year's 11.11 Shopping Festival.

Alibaba says it hit USD1 billion in gross merchandise volume at 12:17 A.M. this morning. As impressive was news that nearly half of all transactions took place via smartphones and other mobile devices.

Alibaba Group is rolling out the sale worldwide this year. Globally, the company says the strongest overseas traffic was coming from Hong Kong, the U.S. and Taiwan.

Last year's 24-hour sale saw USD5.8 billion worth of goods transacted over Alibaba Group's Tmall.com and Taobao Marketplace platforms, making it the biggest shopping day in the world, topping the sales on Black Friday and Cyber Monday combined.

Previous 11.11 Shopping Festivals have been limited mostly to the mainland. But for the first time this year, AliExpress, Alibaba Group's English-language consumer shopping platform will be participating, offering 50% off on one million products to customers overseas.


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Chinese Internet portal NetEase.com announced that the company will officially close its blog services and recommends users to move their blogs to LOFTER, a microblog service at NetEase.

According to NetEase, the blogs moving to LOFTER will maintain the same contents. Meanwhile, the company will completely shut down its blog services in the coming weeks.
LOFTER is a microblogging platform launched by NetEase in 2011. After moving blogs to LOFTER, NetEase users can login using their original blog accounts.

This move represents NetEase's permanent closure of the blog business. Prior to this, the company tried to integrate its blog, microblog, and email services. However, it still could not catch up with its competitor's Weibo service in the blog market.


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