China Watch: Top Business News From the World's Second Largest
) preparing to launch a lower-end iPhone this year? Speculation is
rife after Apple supplier Pegatron said that it plans to increase
its workforce in China as much as 40% in the second half of the
Pegatron chief financial officer Charles Lin also added that he
expects 60% of his firm's 2013 revenue will come from the second
report notes that suppliers have told the agency Apple is planning
to introduce a cheaper iPhone by the third quarter to target
emerging markets like China and India.
According to a recent note by Morgan Stanley analyst Katy Huberty,
a lower-priced iPhone could help Apple triple its current market
share in China.
"Even in a scenario of low 40% gross margin and one-third iPhone
cannibalization rate (flattening legacy iPhone shipment growth,
which we view as conservative, the iPhone Mini adds incremental
revenue and gross profit dollars," said Huberty.
Meanwhile, Apple has jumped right back into the top five of China's
smartphone market in the first quarter of 2013. According to
from Canalys, Apple moved up a spot to fifth, with an 8% share,
thanks to strong iPhone 5 sales and reduced prices of older iPhone
(OTCMKTS:SSNLF) continues to lead the market with a 20% share,
(HKG:2369), Huawei and
(SHE:000063) followed behind.
Beijing Business Daily
also reported this week that the next China Apple store might be
under construction right now in the capital city. According to
sources quoted by the publication, the store will open towards the
end of the year in conjunction with the release of the next
iteration of the iPhone.
Currently, Apple has 11 stores in China, including three each in
Beijing, Shanghai, and Hong Kong, and one each in Chengdu and
Alibaba Buys Stake in AutoNavi
E-commerce giant Alibaba Group will splash out $294 million for a
28% stake in
), an Internet mapping company.
The purchase is in line with Alibaba's strategy of expanding its
smartphone services offerings. Last month, the company bought an
18% stake in
) Weibo, China's microblogging Twitter equivalent.
"This new alliance reflects our vision for the future of the mobile
Internet," Jack Ma, executive chairman of Alibaba and the company's
figurehead, said in a statement. "We're pleased to work with
partners such as AutoNavi to develop terrific applications and
services that bring more convenience, fun, and joy to our users.
We'll continue to work toward this goal with tireless enthusiasm."
Forrester analyst Bryan Wang explained to the
Wall Street Journal
how Alibaba could take advantage of AutoNavi and Weibo to sell
"If I know you're at the
) store, I can push a Uniqlo advertisement to you [on your
smartphone] and you can compare that… Then with Sina Weibo you can
share the experience…there are many ways you can leverage this
ability," he said.
April Auto Sales Rise in China
Despite a lackluster economic recovery, China auto sales rose 13%
in April to 1.8 million vehicles, compared with 1.62 million a year
"The result reflected strong consumer demand as well as a good
inventory management by dealers," said UBS Securities in a research
note. Sales of passenger cars improved 13% to 1.44 million
Sales improved even though China's economic growth has slowed to
7.7% in the first quarter from 7.9% in the last quarter of 2012.
Japanese carmakers reported better April results overall compared
with the last month.
(OTCMKTS:NSANY) posted a 2.7% year-over-year increase in April
sales after a 17% plunge in March.
) saw sales fall 6.5% last month, though that was still better than
the 17% slide in March. Similarly,
(HMC) 2.4% April sales dip was an improvement over March's 6.6%
American auto companies reported stronger results than their
(GM) said sales of GM-branded cars and those of its Chinese
partners jumped 15.3% last month to 251,870 vehicles, while
(F) reported a sharp 37% increase to 75,337 vehicles.
CNPC Makes Move to Buy Brazil's Barra
China National Petroleum Corporation is in negotiations to buy
Brazilian oil company Barra Energia Petroleo e Gas for $2 billion,
reported, adding that a deal could be reached by the end of the
Backed by government funding, Chinese energy firms have been on an
foreign acquisition spree
in the past few years in order to secure domestic energy needs.
"It looks like the state-owned CNPC can gain access to one of the
largest offshore reserves in the world through the deal, and build
a foundation for long-term development in
," Shi Yan, an analyst at UOB-Kay Hian in Shanghai, told Bloomberg.
"Buying up assets from South America has long been part of CNPC's
global strategy to build up exploration and refining portfolios in