China Watch: Top Business News From the World's Second Largest
Global mobile phone sales slowed down in the first quarter of 2013,
with research firm Gartner saying that only one region, Asia
Pacific, registered sales growth.
According to Gartner
, close to 426 million mobile phones were sold worldwide, which was
a 0.7% increase from a year ago. However, sales in Asia Pacific
grew a strong 6.4% year-on-year.
An Apple store in Shanghai
"More than 226 million mobile phones were sold to end users in
Asia/Pacific in the first quarter of 2013, which helped the region
increase its share of global mobile phones to 53.1% year-on-year,"
said Anshul Gupta, principal research analyst at Gartner. "In
addition, China saw its mobile phone sales increase 7.5% in the
first quarter of 2013, and its sales represented 25.7% of global
mobile phone sales, up nearly 2 percentage points year-on-year."
For the quarter,
) saw sales to end users hit 38.3 million units, with mainland
China alone contributing almost 7 million units thanks in large
part to the reduced price of the iPhone 4.
"Apple is faced with the challenge of being increasingly dependent
on the replacement market as its addressable market is capped. The
next two quarters will also be challenging, as there are no new
products expected to be coming before the third quarter of 2013,"
In terms of global smartphone market share, Apple remained in
second place and saw its share dip to 18.2% from 22.5%.
(OTCMKTS:SSNLF) remained the top dog with a 30.8% share, which was
an increase from 27.6% in 2012.
(SHE:000063) filled up the rest of the top five.
Policy Shift in China to Boost Foreign Carmakers
Foreign automakers such as
) received good news this week as China announced that it will
adopt policies to boost foreign auto investment in western China.
China's National Development and Reform Commission said in a
statement that from June 10, foreign auto investment will be
offered preferential treatment, though no details were offered,
For seven years, foreign carmakers had enjoyed subsidies on their
Chinese investments, but the NDRC removed them from its list of
industries that could obtain government incentives in January 2011
because of a problem of overcapacity. Analysts now worry the
problem might rear its head again.
"The change in policy direction is meant to boost foreign
investment and economic growth rather than for the need of the auto
industry," said Zhang Xin, an analyst with Guotai Junan Securities
Co. in Beijing. "It could well cause an increase in excess capacity
and make it more difficult for local automakers to compete with
Sina Sees Loss Narrow in First Quarter
), which owns Weibo, China's largest Twitter-like microblogging
service, posted a first-quarter net loss of $13.2 million, compared
with a loss of $13.7 million a year ago. The improved figure was
still far from the consensus estimate of $5.6 million however.
With more and more of its 500 million Weibo users accessing the
service through mobile devices, Sina has had to increase spending
to improve its offerings on smartphones and tablets. The company's
advertising revenue was also hurt, thanks to the slowdown of
China's economy, which has also affected the earnings of other
Internet firms like
"Sina's costs on development and staff is quite big," Deco You, a
Beijing-based analyst at Internet consulting group iResearch, told
before Sina's earnings announcement. "The company lacks new revenue
In April, Sina sold an 18% stake of Weibo to Chinese e-commerce
giant, Alibaba Group, for $586 million with the aim for improving
For the second quarter, Sina projects net revenues of between $143
million and $147 million, including advertising revenue of $117
million to $119 million. The analysts' consensus forecast now is
Caterpillar Gets Reduced Purchase Price in Accounting
It's small comfort, but
(CAT) has managed to negotiate a reduction in purchase price for
the Chinese mining equipment company whose accounting
irregularities compelled Caterpillar to write down some $580
In November 2011, Caterpillar had agreed to acquire ERA Mining
Machinery, a unit of China-based Mining Machinery. However, in
January this year, Caterpillar reported a "deliberate, multi-year,
coordinated accounting misconduct" at Siwei, a subsidiary of ERA,
which forced the industrial giant to take an impairment charge.
As part of the accounting fraud settlement, Caterpillar's total
outstanding payments to Mining Machinery were cut to $29.5 million
from $164.5 million.
''We are pleased to resolve these issues with the MML Parties,
which, as we move forward, will position Caterpillar to put greater
focus on improving the Siwei operation,'' said Steve Wunning,
Caterpillar group president with responsibility for Resource