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IT&TELECOMNEWSLETTER|28NOVEMBER2013HardwareChinabiggestandfastestgrowingsmartphonemarketHonHaimovingonfromcontractmanufacturingU.
S.
techcompaniesfacingbacklashinChinaSamsungandXiaomiwinnersinsmartphonemarketOperatorsChinaMobile'sBeijingbranchstarts4GsmartphonesalesHongKongreassigns3GspectrumSoftwareSAPandChinaTelecomtoofferweb-distributedbusinesssoftwareDemandfor3-DCADsoftwareproductsrisingTelecomMfg.
Co.
Huaweihaseyeon5GHuaweilookstoorganicgrowth,notacquisitionsLenovoreportsrecordprofitandrevenueinfiscalQ2XiaomifacestestinTaiwanWebChina'sfirstonlineinsurancefirmestablishedCompetitioninsearchmarketincreasesMicrosoft'sSkypetorunundernewjointventureinChinaSocialmediadrivehelpslift'Double11'salesOnlinevideoproviderssueBaiduoverillegallinksWeibooperatorSinamorethandoublesprofitIMappMomomorepopularthanFoursquareNQMobile'sprofitmorethandoublesinQ3RevenuegrowthslowsatTencentOnlinecurrencyBitcoinisboominginChina"Taobaovillages"reapingriche-commerceharvestMobilepaymentmarketgrowingstrongSupremeCourthearsfirstwebanti-monopolycaseOne-linenewsFCCCIT&TelecomNewsletterNo84,November28,2013Page1HARDWAREChinabiggestandfastestgrowingsmartphonemarketChinaaccountedfornearly40%oftheglobalsmartphonemarketasofthethirdquarter,andenjoystheworld'sbiggestgrowthinsmartphonesales.
Smartphoneshipmentsforthethirdquarterstoodatroughly100millioninChina,ayear-on-yearincreaseof64%,accordingtoresearchfirmCanalys.
SamsungElectronicshasnabbednearly20%ofthemarket,butlocalvendorsarepresentingathreattotheSouthKoreansmartphonemaker.
"InChina,localvendorsLenovoGroup,YulongCoandHuaweiTechnologiesCoaredirectlyfollowingSamsung,"saidNicolePeng,ResearchDirectoratCanalysChina.
Apple'sstrategytoprioritizeChinaasoneoftheinitiallaunchcountriesforitsnewproductshastheUnitedStatescompanyclinchingfifthplace,followedbyXiaomiCorpandZTECorp.
IDC,aU.
S.
-headquarteredconsultingfirm,estimatesthatChina'ssmartphoneshipmentscouldhit360millionthisyear,whiletheglobaltotalisontracktobreak1billion,representinga40%year-on-yearjump.
"Rapidgrowthistheresultofavarietyoffactors,includingsteepdevicesubsidiesfromtelecomcarriersaswellasagrowingarrayofsmartphonespricedbelowUSD200,"IDCsaid.
ItforecastthatChina'ssmartphoneshipmentswillexceed450millionby2014,boostedbyanincreasingpenetrationrateofmobiledevicesandtheupcomingfourth-generation(4G)telecommunicationnetworks.
Canalysresearcherssaidthatlarge-screensmartphones-those5inchesandlarger-aregrabbingmarketsharefromsmallerproducts.
"Overthenextyear,theAsia-Pacificisexpectedtocontinuetoleadthedemandforlarge-screensmartphones,"saidWangJingwen,Shanghai-basedAnalystwithCanalys.
HonHaimovingonfromcontractmanufacturingHonHaiPrecisionIndustry'sdecisiontomoveawayfrommajorclientAppleandthelower-valueelectronicscontractmanufacturingbusinessisalong-termbetthatwillimprovemarginsandoffsetrisinglaborcosts,analystssay.
TheTaiwanesecompany,betterknownbyitstradingnameFoxconn,isbuildinganintegratedservicepackagerangingfromelectronicdevicestosoftwareapplicationsandcloudcomputingasitstrivestobecomemoreconsumer-driven.
HonHaistilldrawsanestimated40%to50%ofitsrevenuefromassemblingiPhonesandiPads,aslightdeclinefrom60%ayearago.
Butanalystssaidthemovewaslikelytoboostprofitmarginsthisyearandinthelongerterm.
HonHaiannouncedabetter-than-expectednetprofitofNTD30.
75billionforthethirdquarter,higherthanamedianforecastofNTD25.
99billionby13analystspolled.
ThefigurecomparedwithanetprofitofNTD16.
98billioninthepreviousquarterandNTD30.
26billionayearearlier.
Operatingprofitmarginrose1.
36percentagepointsfromthepreviousquarterto3.
46%.
Themargininthethirdquarteroflastyearwas3.
4%.
ImprovedproductionefficiencymayallowHonHaitoreducecosts,whichcouldresultinimprovedoperatingmargins,accordingtoJPMorganChase.
Sofarthisyear,HonHaihasteamedupwithChinesemobilevideoproviderLeTVinabidtoselllargeinternet-enabledtelevisions.
ThecompanyisalsosettingupafactoryintheUnitedStatestobuildtelevisions,theSouthChinaMorningPostreports.
Italsorecentlyboughtalicenseforthefaster,internet-enabled4GmobilenetworkinTaiwan,aUSD311millioninvestmentaimedatlinkingitssoftwareanddevices.
U.
S.
techcompaniesfacingbacklashinChinaU.
S.
technologycompaniesincludingCiscoSystems,InternationalBusinessMachines(IBM)andMicrosoftmayfacenewchallengessellingtheirgoodsandservicesinChinaasfalloutfromtheU.
S.
spyingscandalstartstotakeatoll.
"AllthebigU.
S.
ITcompaniesareconcerned,"saidJimLewis,SeniorFellowwiththeCenterforStrategicStudiesinWashington,whoisanexpertonChinaandtechnology.
"ButsofarCiscoisbearingthebruntofit.
"IBMreportedlastmontha22%dropinChinarevenueandMicrosoftexecutivessingledoutChinaasthecompany'sweakestperformingareaintheworldduringtheSeptemberquarter.
AlthoughBeijinghasnotprohibitedstatefirmsfrompurchasingWestern-madetechnologyservicesandequipment,thegovernmenthassentaclearmessagetochooseChinese-madeequipmentfirst,executivesbasedinthecountrysay.
"Thegovernment'ssignalisprettyclear–theywanttorelylessonU.
S.
products,suchasthosefromIBM,OracleandEMC,"saidaformerChina-basedtelecommunicationsexecutive.
Fourdomesticsoftwareandhardwaremakers,includingChinaNationalSoftware&Service,announcedthismonththeyhadreceiveda"top-tier"ratingfromtheMinistryofIndustryandInformationTechnology(MIIT).
CiscoChiefFinancialOfficerFrankCalderonisaidthecompanywasmostaffectedbyapoliticalbacklashinChinabutnotedthatitwasdifficulttoquantifyhowmuchofitsrevenueshortfallwasduetopoliticsversusmacro-economictrends.
FCCCIT&TelecomNewsletterNo84,November28,2013Page2SamsungandXiaomiwinnersinsmartphonemarketSamsungandXiaomiarethebigwinnersinChina'ssmartphonemarketthisyearwhileApplesalesdropped,accordingtoanewresearchreportbyconsumerinsightcompanyKantarWorldpanel.
GalaxyS3andS4modelshavebeenespeciallypopular,ashasbeentheGalaxyNote2,a"phablet".
Thecombinedsalesofthesethreemodelsaccountedfor25%ofSamsung'stotalprofitforthethirdquarterthisyear.
Halfofall"premium"smartphones–phoneswithapriceofatleastCNY3,000–soldinChinaduringtheperiodwereSamsungproducts.
ButKantar'sresearchalsoshowsthecompanywouldneedtocreatemoreinnovativemodelsifitwantstostayaheadinthelongrun,particularlyastheGalaxyS4iswidelyseenasonlyanincrementalupgradeovertheS3.
Xiaomibenefitedfromitslatest"budget"smartphone–theMi-3,startingfromCNY1,999.
ThispricepointhashelpedXiaomiselltoconsumerskeenon"high-spec,low-pricephones",thereportsaid,andhelpedthecompanybeatLenovotobecomethesecond-largestAndroidphonesellerinthethirdquarterofthisyear.
"Consumersarebeginningtorealizethatgooduserexperiencesdon'tnecessarilycomewithaheftypricetag,"thereportsaid.
IncontrasttothesuccessenjoyedbySamsungandXiaomi,Apple'ssalesthisyearhavelaggedbehindthecompetition,anditsmarketsharedroppedfrom19.
5%inthesecondquarteroftheyearto18%inthethird.
ThedropinsalesmayhavebeencausedbythelaunchoftheiPhone5sand5conSeptember20asconsumersstoppedbuyingoldermodels.
KantarWorldpanel'sresearchwascarriedoutviaasurveyof15,000Chinesesmartphoneusersoverthepastyear.
SonyCorpplanstosellgameconsolesinChinathroughthenewfreetradezone(FTZ)inShanghai.
Sony,whichisdevelopingthePlayStation4,isevaluatingandresearchingpossibilitiestoexpandthegamebusinessinChina,wheretheyarenotofficiallyavailable.
Foreignfirmsarenotallowedtosellgameconsolesinthedomesticmarket.
Applestartedsellingitsnew-generationiPadMiniwithRetinadisplayonNovember12inChina,oneofthefirstbatchofcountriesandregionstodebutthedeviceglobally.
ItcanbebookedonSuningandAppleChinawebsitesorboughtdirectlyinSuning's500outletsnationwide.
The7.
9-inchiPadMini,whichcomesinfourmemorysizes,startsatCNY2,888forthe16-gigabytemodel.
The128GBmodelcostsCNY4,988.
TheiPadMinidevicessoldinChinaarewi-fionlymodels.
Appledidnothypethestartofsalesinadvance,indicatingthattherecouldbesupplyproblems.
Applequietlyissuedanewsreleaseonitsimmediateavailability.
ThesalesrevenueofChina'sinformationtechnologysectorwillhitCNY12.
5trillionthisyear,accordingtotheMinistryofIndustryandInformationTechnology(MIIT).
Inthefirstninemonthsof2013,thesalesrevenuehitCNY8.
98trillion,up14%annually,saidDingWenwu,DirectorofMIIT'sElectronicsandInformationDepartment.
Nokiahaslaunchedthebig-screenLumia1520phablet,ahybridbetweenasmartphoneandatablet,inChina.
TheLumia1520,witha6-inchscreen,distinguishesitselfinthemarketbyfeaturingsuperiorimagingcapability,goodmappingservicesandembeddedOfficesoftwarethatconnectsmobiledevicesandpersonalcomputers,accordingtoErikBertman,GeneralManagerofNokiaChina.
QualcommandSamsungwilllaunchproductstosupportChina'sownnavigationsystemBeidoutohelpitbreakthemonopolyoftheU.
S.
-developedGPSsystem.
SamsungwilllaunchanewversionofitsGalaxyNote3smartphonethatwillworkonChina's4GtechnologyTD-LTEandtheBeidounavigationsystem.
ZTEplanstolaunch"smart"wearabledevices,includingwatches,glasses,shoesandsocks.
ZTE'ssmartwatchwouldbelaunchedinChinainthesecondquarterofnextyearandintheU.
S.
andEuropelater,whilethetimingfortherestofthedevicesdependedonmarketconditions.
Thewatchwouldonlybecompatiblewithitsownsmartphones.
ZTEisnowtheseventh-largestsmartphonevendorbyshipmentvolumeinChina,withitsmarketsharedownto5%from10%lastyear.
OPERATORSChinaMobile'sBeijingbranchstarts4GsmartphonesalesDespitethefactthatthegovernmenthasyettoissue4Glicensestotelecomcarriers,ChinaMobile'sBeijingbranchstartedsalesof4Gsmartphoneswithtwomodelsonoffer-Sony'sM35TandSamsungElectronics'GalaxyNote2.
CustomersdonotneedtochangetheirphoneFCCCIT&TelecomNewsletterNo84,November28,2013Page3numbersbutjusthavetogetanewSIMcardfortheir4Ghandsets.
However,thecoverageof4GnetworksinBeijingislimited,saidGaoShu,SpokeswomanforChinaMobile'sBeijingbranch.
Onlypeopleinareasinsidethecapital'sThirdRingRoadwillbeabletoaccessthenetwork.
SomeChinesecities,includingGuangzhouandHangzhou,havealsostartedoffering4Gservicesonatrialbasis.
ChinaMobile-theonlyoperatorinthecountrycurrentlytesting4Gnetworks-hasadoptedthedomesticTimeDivision-LongTermEvolution(TD-LTE)4Gtechnology.
Thelackofmature4GsmartphoneshaslongbeenseenasamajorobstaclefortheexpansionofChinaMobile's4Gbusiness,butthesituationhasimprovedinrecentmonths.
ChinaMobile'snetprofitdropped9%inthethirdquarterpartlyduetotheincreasingchallengesposedbymobileinternetapplications.
4Gcouldhelpthecarriertoattractmorehigh-endusersfromrivals.
Thelaunchof4GservicesinChinawilldefinitelybeanewdriverforthegrowthofthenation'ssmartphonemarket,incitingpeopletobuynewphones.
RyanReith,ProgramDirectoratIDC'sWorldwideQuarterlyMobilePhoneTracker,saidthatChinahasbecomeoneofthefastest-growingsmartphonemarketsintheworld,accountingformorethanone-thirdoftotalshipmentsinthethirdquarteroftheyear,theChinaDailyreports.
Chinaiscarryingout4Gnetworktestsin10cities,includingShanghai,BeijingandGuangzhou.
ChinaMobilewillstart4GservicesonDecember18withanewbrand"He",meaningharmoniousinChinese.
Chinaisexpectedtoissuelicensesfor4Gbeforethetelco'snewservicesstart.
UsersinBeijing,GuangzhouandChongqingwillbethefirsttoenjoycommercial4G.
Shanghai,whichisstillbuildingacitywide4Gnetwork,willlaunchtheserviceslater.
4Gphoneserviceswillbecomerapidlypopularthankstothelowcostof4Gphones,accordingtoLiYue,ChinaMobile'sPresident,whoexpectssome4GphonespricedbelowCNY1,000toappearinthesecondhalfofnextyear.
AppleisalsosettointroduceiPhonessupportingthe4GnetworkinChinaonDecember18.
HongKongreassigns3GspectrumHongKong'stelecommunicationssectorisheadedforashake-upthatcouldtestthepatienceofconsumersandlocalnetworkoperators,afterthegovernment'sdecisiontoreassigntheexisting3Gmobilespectrum.
TheCommunicationsAuthoritysaidthegovernmentwouldauctionoffathirdofthe3Gspectrumcurrentlyheldbyeachofthecity'sfourincumbent3Gmobilenetworkoperatorsinthefourthquarternextyear.
Butthegovernmentwillalsooffertheoperators–SmarToneTelecommunications,CSL,HutchisonTelecommunications'ThreeHongKongandPCCW'sHKT–rightoffirstrefusaltobereassignedtwo-thirdsofthespectrumtheynowhold.
TheirlicensesareduetoexpireinOctober2016,wheneachoperatorwillmakeHKD151millioninroyaltypayments.
AuthorityChairmanAmbroseHosaidthis"hybrid"approachwould"encouragecompetitionandallownewinvestmenttoenterthelocalmarket.
Itismorelikelytopromoteinnovativeservicesfromnew3Gspectrumassigneesandtheincumbents".
ChinaMobilehasexpressedaninterestinbiddingforthereassignedspectrum.
Thefouroperatorsexpressedtheirdisappointment,raisingthespecterofservicedegradation,includingslowerdownloadspeeds,whenchunksoftheirspectrumareremovedfromserviceinOctober2016.
HutchisonTelecomaccusedthegovernmentandinparticulartheCommunicationsAuthorityoftotaldisregardforthepublic'sinterest.
Theoperators'lawyersareconsideringlitigation.
OperatorsinHongKongareexpectedtofocusonvitaltechnicalupgradesfortheirhigh-speed4Ginfrastructureoverthenext12to24monthstoallowforhigh-qualityvoiceservices.
Currentlytheyoffer4Gsubscriberscircuitswitch-basedvoiceandtextmessagingservicesthroughexisting3Gand2GmobilenetworkssincethecurrentLTEarchitecturedoesnotofferthosecapabilities.
HKTannouncedthecompletionofitsvoice-over-LTE(VoLTE)networktrialswithHuaweiTechnologies,guaranteeingtheavailabilityofhigh-definitionvoiceoverits4GnetworkbytheendofDecember.
AnindustrysourcesaidtheVoLTE-relatedplansbytheotheroperators"dependonthewideavailabilityofmobiledevicesthatsupportthetechnologyanditsmaturitytoreplace3Gvoice".
LuXiangdong,53,formerVicePresidentofChinaMobile,hasbeensentencedtolifeinprisonafterbeingfoundguiltyofreceivingmorethanCNY20millioninbribes.
Luislikelytoappealafterherefusedtoaccepttheverdict.
Morethan40illegalmobilestationswhichblockcellphonesignalsandsendspammessagestousersinShanghaihavebeendetected,butcrackingdownontheoperatorsisdifficultbecausetherearenospecificlawsbarringthespreadofspammessages.
Theillegalmobilestationsplacedinsedansusuallyworkaroundhotels,FCCCIT&TelecomNewsletterNo84,November28,2013Page4restaurantsandotherdowntownpublicvenueswithbigcrowds.
Morethan50,000messagescanbesentoutinanhour.
Somestationsaresponsoredbyrestaurantsandhotelsformarketingpromotions.
OnlyChinaMobileusersareaffected.
ThenumberofChinesemobilephoneusershit1.
22billionattheendofOctober,theMinistryofIndustryandInformationTechnology(MIIT)said.
Amongthem,67.
19%,or817millionmobileusers,areconnectedtotheinternetand34.
5%are3Gusers.
Incontrast,thenumberoffixed-lineusersshrankby8.
82millioninthefirsttenmonthsto269millionbytheendofOctober.
SOFTWARESAPandChinaTelecomtoofferweb-distributedbusinesssoftwareSAP,theworld'slargestsupplierofbusinessmanagementsoftware,planstorampuptheadoptionofcloud-computingservicesbylocalandmultinationalcompaniesinChina,followingthelaunchofanexpandedcooperationagreementwithChinaTelecom.
AjointventurebetweenSAPandChinaCommunicationsServices(CCS),aHongKong-listedsubsidiaryofChinaTelecom,willnowincludedeliveryofcloudofferingsnationwide,startingwithadvancedhumancapitalmanagement(HCM)solutionsfromSAPunitSuccessFactors.
SAPsaiditwasthefirstinternationalsoftwaresuppliertobringanintegratedHCMofferingunderasoftware-as-a-service(SaaS)platformhostedinaChinesedatacenter.
TelecommunicationsservicesfirmCCShassigneduptobethefirstcustomerandisexpectedtohave12,000users.
TheambitiousinitiativeispartofSAP'songoingfive-year,USD2billioninvestmentprograminChina.
Demandfor3-DCADsoftwareproductsrisingChina'smanufacturingsectorrequiresmore3-Dcomputer-aideddesign(CAD)softwareproductsasitmovesupthevaluechainandcompetitionintensifies,saidZiYingkun,GeneralManagerofthe3-DdivisionofZWCADSoftwareCo,amajordomesticCADsoftwaredeveloper.
Guangzhou-basedZWCADmadeitsforayintothe3-Dmarketin2010afteracquiringVXCorp,aU.
S.
companythatfocuseson3-Dproducts.
"Thenumberofour3-Dclientshasdoubledeveryyearsincethen,"Zisaid.
Inthedomesticmarket,ZWCADhasmorethan500clientswith3,000authorizedlicenses.
3-Drepresentsthefutureofindustrialdesign,Zisaid.
Systemscanbemoreeasilytestedwhenbeingdesignedwith3-Dsoftware,reducingtherisksoffaileddesigns.
ZWCADhasbeenintegratingproductswithmanagementsoftwarecompanies,suchasCoreTechSystemCo,aTaiwan-basedplasticinjectionmoldingsimulationsolutionprovider,andtheU.
S.
softwaredeveloperANSYS.
MicrosofthasmadeithardertomonitorcallsandchatsoveritsSkypephoneserviceinChina.
Skypeendedaneight-yearjoint-venturewithHongKong-basedTOMGroupandteamedupwithGuangmingFounder(GMF),ajoint-ventureoftheBeijing-basednewspaperGuangmingDailyandtheFounderGroup.
SkypeitselfisnowpartofMicrosoft,whichliftedallcensorshiprestrictionsontheirChinaproduct.
Allusercalls,chatsandlogininformationareencryptedandbeingcommunicateddirectlytoMicrosoftviaHTTPS,whileTOMstoredinformationonserverslocatedinChinawithnoprivacycontrols.
TELECOMMFG.
CO.
Huaweihaseyeon5GChinesetelecomequipmentvendorHuaweiTechnologiesannouncedthatitwillinvestatleastUSD600millioninresearchanddevelopment(R&D)offifth-generation(5G)mobiletechnologyby2018.
InMay,SouthKorea-basedSamsungElectronicssaidthatitsuccessfullytestedsuper-fast5Gtechnologythatallowsuserstodownloadafilminjustafewseconds.
Shenzhen-basedHuaweiexpectsthatthefirst5Gnetworkswillbereadyforcommercialdeploymentstartingin2020.
Thetechnologywilldeliverpeakdataratesofmorethan10gigabitspersecond,or100timesthespeedofcurrent4Gnetworks.
HuaweihasparticipatedintheEuropeanUnion's5Gresearchprojects,helpedestablishthe5GInnovationCenterinBritain,andparticipatedinjointresearchprogramswithmorethan20universitiesaroundtheworld.
In2012,HuaweiinvestedUSD4.
8billioninR&D,accountingfor13.
7%ofitsannualsales.
Thecompany'sR&DinvestmentsurpassedCNY130billionoverthepast10years.
ViceFCCCIT&TelecomNewsletterNo84,November28,2013Page5MinisterofScienceandTechnologyCaoJianlinsaidrecentlythattheMinistrywillincreaseitsinvestmentandsupportfor5Gtechnology,afterallocatingaboutCNY160milliontoR&Dworkon5GtechnologyinChinathisyear.
Notonlysmartphonesandtablets,butalsovehicles,meters,medicaldevicesandhomeappliances,willbeconnectedtothenetworkusing5Gtechnology.
Huaweilookstoorganicgrowth,notacquisitionsHuaweiTechnologies,thethird-largestsmartphonevendor,isfocusingonagradualgrowthstrategyinsteadofacquisitionstochaseSamsungElectronicsandAppleformarketshare,ViceChairmanEricXusaid.
"We'renotexpectinganexplosivedevelopmentofoursmartphonebusiness,ratherwewanttogrowthatbusinessstepbystep,"EricXutoldreportersinLondon.
"Ultimatelywewanttobetheleadingbrandworldwideinsmartphones,butitwilltakeawhiletogetthere.
"XuconfirmedHuawei'ssmartphonegrowthtargetof10%thisyearandnext.
ThecompanyisrelyingmoreonhandsetswhileitfightscybersecurityconcernsthathaverestricteditsaccesstotheU.
S.
andAustralianphoneequipmentmarkets.
Huawei,China'slargestsupplieroftelecommunicationsnetworks,isn'tplanninganacquisitiontobolsteritspositionbecauseofpotentialproductoverlaps,hesaid.
Thecommentswoulddampspeculationoveralink-upbytheChinesecompanywithtakeovertargetssuchasFrance'sAlcatel-LucentandBlackBerryofCanada.
Huaweihasn'theldanydiscussionswithBlackBerry,saidXu,whoisalsoactingCEOunderarotatingarrangementsetuptwoyearsagobytheclosely-heldcompany.
Huaweishipped12.
5millionsmartphonesinthethirdquarter,taking4.
8%oftheglobalmarket,trailingonlySamsung's31%andApple's13%,researcherInternationalDataCorp(IDC)saidlastmonth.
HuaweiiscloselytrailedbyLenovoGroup,whichheld4.
7%oftheglobalsmartphonemarketinthequarterwith12.
3millionunitsshipped,andLGElectronicsat4.
6%with12millionunitshipments,accordingtoIDC.
SmartphoneshelpedboostHuawei'ssales11%inthefirstsixmonthsthisyeartoCNY113.
8billion,theSouthChinaMorningPostreports.
LenovoreportsrecordprofitandrevenueinfiscalQ2LenovoGroupbeatexpectationswithnetprofitrising36%toUSD220millioninitsfiscalsecondquarter.
Lenovosaiditexpectstosell50millionsmartphonesthisyear,morethandoublelastyear's20million.
Italsosaiditexpectstosell10milliontabletcomputersthisyear,10timesmorethanayearago,ChairmanandChiefExecutiveYangYuanqingsaid.
RevenuewasUSD9.
8billion,a13%increaseyear-on-year.
"Wehaveachievedrecordrevenueandrecordprofit,andimprovedprofitabilitysignificantly,"Yangsaid.
"ThePCmarketisrecovering,andtabletgrowthcontinuesshiftingtomainstreamandentry-leveldevices,"headded.
Bytheendofthefiscalsecondquarter,Lenovoremainedtheworld'slargestPCvendoraheadofHewlett-PackardandDell,withitshighest-everquarterlymarketshareof17.
7%,up2percentagepointsfromayearago,accordingtoInternationalDataCorp(IDC).
Lenovo'sPCshipmentsduringitssecondfiscalquarterreached14.
1millionunits,growingthefastestamongtheworld'stopfivePCmakers.
Boominglaptopsalescontributedhalfofthecompany'srevenue.
RevenuefromLenovo'sMobileInternetandDigitalHomebusiness,includingsmartphones,smartTVsandtablets,contributed15%oftotalrevenuesinthefiscalquarter,upfrom8%oneyearagoand4%twoyearsago.
Initsfiscalsecondquarter,smartphonesalesjumped78%year-on-year,theShanghaiDailyreports.
Lenovoplanstosellsmartphonesin20moremarketsoverthenextfewquartersandincreasemediatabletsalesworldwidethroughexistingcomputerchannels.
Lenovopostedarecordhigh2.
3millionglobaltabletshipmentslastquarter,whichmadeitoneoftheindustryleaders.
YangsaidLenovo'sgoalwastoraisethecontributionofsmartphonesandtabletstototalrevenuetoabout50%.
"WeexpectthefiscalthirdquartertoDecembertoseesolidquarter-on-quartergrowthonthebackofahighseasonaleffectandnewmodellaunches,"BarclaysAnalystKirkYangsaid.
XiaomifacestestinTaiwanXiaomiTechnology,theChinesemakerofcheapiPhonelookalikesthatisreachingoffshoreforthefirsttime,willfindittoughertoestablishacustomerbaseinTaiwanthanathome,analystssay.
Beijing-basedXiaomi,foundedjustthreeyearsago,hasbecomeChina'sfifth-mostpopularsmartphonebrand,with7.
19millionunitssoldlastyear.
ItbegansellingitshandsetsinTaiwanaboutsixmonthsago.
Taiwanesecustomerswillbehardertopleaseastheynormallystickwitholder,trustedbrands,consumerelectronicsanalystssay.
SomelookdownonmainlandproductsbecauseofperceptionsofpoorqualityandXiaomi'sfateinTaiwanisexpectedtooffercluesabouthowwellthebrandmightsellinotheroffshoremarkets.
"IthinkFCCCIT&TelecomNewsletterNo84,November28,2013Page6there'ssomeaudiencethat'sinterestedinXiaomi'soffering,butdefinitelythatgroupisnotasbigasthesameaudienceinChina,"saidC.
K.
Lu,SmartphoneAnalystwithmarketresearcherGartner.
"InTaiwan,brandistheconcern,andnoteveryoneknowsXiaomi,orit'snotthebrandeveryonetrusts.
"ItsAndroidsmartphones,whichsellforaslittleasUSD320onthemainland,eatingintothemarketshareofrivalsLenovoandZTE,wouldattractcost-consciousTaiwaneseconsumerswholikedtocustomizetheirphones,Lusaid.
AnalystsexpectXiaomiwillbuildupafollowingamongpoorerTaiwaneseandeventuallyinemergingmarketsbeyondGreaterChinabuttoreceivelessenthusiasmelsewhere.
"XiaomihaslimiteddistributionchannelsoutsideChina,itssmartphonedesignsarenotyetsignificantlydifferentfrommostotherAndroidcompetitors,andtheXiaomibrandishardforWesternconsumerstopronounce,spellorremember,"saidNeilMawston,WirelessDeviceExecutiveDirectoratStrategyAnalyticsinBritain.
XiaomihasbeenofferingphonesthroughTaiwan'sNo3mobilecarrier,FarEasToneTelecommunications,whichgivesthemoutfreeofchargewithnewserviceaccounts.
FarEasTonewouldnotdisclosefiguresforXiaomi,butacompanypublicistcalledsales"feverish".
ChinesemediasayXiaomihastargetedBrazil,IndiaandRussiaforfuturesalesgrowth.
LenovoisusingBollywoodiconRanbirKapoortoboostitsbrandrecognitioninIndia.
"Lenovohashadalongandverystrongpresenceinthelaptopspace,acquiringasolidunderstandingoftheIndianconsumer'spsyche,"saidJayanthKolla,FounderandPartnerattelecommunicationsresearchfirmConvergenceCatalyst.
"Ithasalsoinvestedalotinbuildingthebrand,asopposedtootherChinesecompaniesthatlookforquickreturns.
TheaverageIndiancustomerdoesn'tevenknowthatit'saChinesecompany.
"IndiaMarketingDirectorBhaskarChoudhurysaidLenovoisaglobalbrand.
AccordingtoIDC,Indiaissettobecomethethird-largestsmartphonemarketby2017,afterChinaandtheU.
S.
LenovoGroupbecamethethird-largestsmartphonemakerinthethirdquarteroftheyear,accordingGartner.
ThecompanysurpassedSouthKorea-basedLGElectronics.
Beijing-basedLenovoshipped12.
9millionsmartphones-representinga5.
1%shareoftheglobalsmartphonemarket-inthethirdquarter,Gartnersaidinamobilephoneindustryreport.
Lenovo'squarterlysmartphonesalesrose84.
5%year-on-year.
LenovoalsomoveduptherankstotheNo7spotinthemoregeneralglobalmobilephonemarket.
Inthefirsthalfofnextyear,LenovoplanstointroduceitssmartphonestomaturemarketssuchastheUnitedStatesandEurope.
TheNationalDevelopmentandReformCommission(NDRC)hasstartedaninvestigationonQualcommundertheChineseAnti-MonopolyLaw.
Qualcomm,theworld'sbiggestmakerofcellphonechips,getshalfofitsrevenuefromChinaandhassoughtmoregrowthinthecountryastelecomoperatorssuchasChinaMobileupgradetheirhigh-speednetworkservices.
ItsrevenuefromChinarose54%toUSD12.
3billionthisyear,49%oftotalrevenue.
WEBChina'sfirstonlineinsurancefirmestablishedZhongAnOnlinePropertyInsurance,China'sfirstonlineinsurancefirm,planstorolloutitsfirstproductsbytheendoftheyear.
Thenewventureisathree-waytie-upbetweenPingAnInsurance,TencentandAlibaba.
Thepartnerswouldaddresstherisksofonlineshoppinganddesign"innovativeproducts"tosolvetheseproblems,saidChiefExecutiveYinHaiatthecompany'slaunchceremonyinShanghai.
AlibabaisthelargestshareholderofZhongAnwitha19.
9%stake.
TencentandPingAneachown15%,whileonlinetravelagencyCtripowns5%.
Thebalanceisspreadamonganumberofothershareholders.
JackMa,ChairmanofAlibaba,saidthemostimportanttaskforZhongAnwastobuildadatabasethatcouldbeleveragedbyallkindsofcompaniesinthefuture.
HeadquarteredinShanghai,theinsurerhasaregisteredcapitalofCNY1billion.
Yinsaidthecompanywouldprovideproductsforinternetenterprisesandindividuals.
ZhongAn'sproductportfoliowouldrangefromenterprisepropertyinsurancetocargotransportationinsuranceandexchangerateinsurance"butallthesebusinessesmustberelatedtointernettransactions",hesaid.
Onlinetransactionsbyindividualsusuallyinvolvedsmallpayments,onaveragejustseveralhundredyuan,headded.
Asaresult,thefirm'sinsuranceproductswillbequitecheap.
FCCCIT&TelecomNewsletterNo84,November28,2013Page7CompetitioninsearchmarketincreasesCompetitionisincreasingamongChina'stopthreesearchengines.
Forthemoment,Baiduremainsthetopplayer.
OnlinesecuritysoftwaredeveloperQihoo360,whichlauncheditssearchenginewww.
so.
cominAugustlastyear,iswinningusersfromBaidu,andclaimeditcommandeda20%marketshareofweb-pagesearchesinOctober.
InSeptember,TencentteamedupwithSogou,asubsidiaryofinternetportalSohu,tobolsteritspresenceinthesearchmarket.
TencentinvestedUSD448millionfora36.
5%stakeinSogou,andmergeditsSososearchengineandQQChineseinputsystemwithSogou.
Thetie-upbetweenthetwoincreasesthecompetitionwiththetoptwoprovidersBaiduandQihoo360.
Thesearchenginebusinessisanimportantbattlefieldbecausesearchservicesarematureproductsgeneratingadvertisingincome.
Nasdaq-listedBaidu,whosecorebusinessissellingadvertisementsonline,postedayear-on-yearriseinrevenueof42.
3%toCNY8.
9billioninthethirdquarterofthisyear.
Asthemarketleader,itcommanded63%ofmarketshareinSeptember,accordingtointernetdataproviderCNZZ.
NextinlinewereQihoo360with19%,andSogouwith10.
4%.
Tencent'sSosowasrankedfourthwitha4%marketshare.
Microsoft'sSkypetorunundernewjointventureinChinaSkype,theinstantmessagingandonlinevoice-and-video-callserviceownedbyMicrosoft,willberelaunchedinChinaunderanewjointventure,followingtheendofalong-standingallianceinthemarketwithTomGroup.
TominformedSkypeusersthatMicrosofttookovertheonlinebusinesswitheffectfromNovember24.
"InChina,Skypesoftwareismadeavailablethroughapartnershiptocomplywithestablishedprocedurestomeetobligationsunderlocallaws,"JuddHarcombe,ManagerofglobalmarketdevelopmentatSkypesaid.
"WearecommittedtomakingthetransitionseamlessforourusersandlookforwardtoTom'scontinuedassistance,"sheadded.
MicrosoftacquiredSkypeforUSD8.
5billiononMay2011andinitiallyrantheserviceasaseparatedivision.
AsweepingreorganizationbyMicrosoftinJulyhassinceputSkypeunderthecompany'sapplicationsandservicesgroup,ledbyShanghai-bornExecutiveVicePresidentLuQi.
RickyLai,ResearchAnalystatGuotaiJunanInternational,saidSkypeunderanewjointventure"wouldstillfindittoughtocompeteonthemainlandagainstTencent'spopularplatformsQQandWeChatandthoseofotherlocalplayers".
EffortsbySkypetoexpanditsonlinevoice-and-video-callserviceinChinahavebeenhamperedbytightindustryregulation.
Socialmediadrivehelpslift'Double11'salesAlibabaandTencentpostedrecordtransactionsonNovember11,alsoknownasSingle'sday,thankstofreegiftsandrewardspromotedontheironlinemessagingplatforms.
AnalystssaidAlibaba,throughitsmarketingonmicrobloggingplatformSinaWeibo,andTencent,withcampaignsonitspopularWeChatsocialmobile-messagingservice,haddemonstratedtheeffectivenessofhavinga"socialcommerce"strategyfortheshoppingday.
ThetotalgrossmerchandisevolumeachievedbyTmall.
comandTaobaoMarketplacehitadailyrecordCNY35.
01billion.
ThattoppedtheCNY19.
1billiontotalonNovember11lastyearandCNY5.
3billionin2011.
RivalTencent's51buycampaignonWeChatallowedsmartphoneuserstoview,makeordersandfinishpaymentdirectlyonthesocialmobile-messagingplatform.
OnNovember11,Tencent's51buywebsiteofferedtheusualextensivesalesthathavebecomethenormonSingle'sDay,oneofChina'sbiggestonlineshoppingfestivals.
Single'sDaybroughtoverCNY500millioninprofittoTencentthisyear,partlythankstoanintegratedcampaignbetweenthe51buywebsiteandTencent'sWeChatmobileapp.
Thecampaignallowedsmartphoneownerstoviewandorderproductsavailableon51buywithrelativeeasethroughWeChat'smenus,andwasaimedatresidentsinBeijing,Shanghai,ShenzhenandGuangzhou.
Despitethesecityrestrictions,oftheroughly600,00051buyordersmadeonSinglesDay,thoseviaWeChatexceeded80,000.
MembersofChina'sonlinecommunityhavelabeledtheprocessalow-keysuccess,evengoingsofarastocallitTencent's"secretweapon".
OthersspeculatedthattheubiquitousnatureofWeChatandtheeaseofshoppingitprovidedwasoneedgethatTencenthadoveritschiefrivalAlibaba,whichorganizedthemajorityofitsSinglesDaypromotionsthroughitswebsites.
Tmall.
comandTaobao.
combothhavemobileversions,butneitherenjoythepopularityofWeChat,whichboastsnearly300millionmonthlyactiveusers.
XiaomisaiditsoldmorethanCNY500millionworthofphonesduringitsSingles'DaypromotionwithAlibaba,whichwouldequatetoaround200,000phonesifoneassumesanaveragepriceofaroundCNY2,500.
FCCCIT&TelecomNewsletterNo84,November28,2013Page8OnlinevideoproviderssueBaiduoverillegallinksSearchcompanyBaiduisbeingsuedforprovidingillegallinkstopiratedbroadcastsofonlinevideos.
AgroupofonlinevideoprovidersincludingYoukuTudou,TencentHoldingsandSohu.
com,aswellastheChinaFilmCopyrightAssociationandtheMotionPictureAssociationofAmerica,aresuingBaiduforCNY300millionforlossestheyclaimarecausedbythecompany'spractices.
Sohu.
com,Tencent,YoukuTudouandLeTVsaidtheyhadsetuptechnicalbarrierstoblockBaidu'saccesstotheironlinevideocontent.
YoukuTudouhasthelargestmarketshareinthedomesticonlinevideomarketwitha28.
3%shareintermsofsalesincome,butitpostedanetlossofCNY105millioninthesecondquarterthisyear,ascontentcostscontinuedtorise.
Baidu'siQiyiandPPStreamhadacombined16.
9%marketshare,followedbySohu's10%andTencent's8.
5%.
"TheallianceisclearlytargetedattherisingpressurefromBaidu'siQiyiandthiscouldpushupthelicensefeesforhigh-qualityTVandfilmcontentnextyear,"saidZhouJuan,GeneralManagerof56.
com,asmalleronlinevideosite.
Baidusaidithadblockedupto5.
8millionlinkstoillegalonlinevideocontentinthepastsixmonthsandsaiditwastakingthecopyrightissue"veryseriously.
"InternetconsultancyiResearchsaidtheonlinevideomarketgrew37.
3%fromayearagointhethirdquartertoCNY3.
25billion,ShanghaiDailyreports.
"Baiduvideosearchpagesdirectlyhostandplayvideocontent,withouttakinguserstoathirdpartysite.
Itisaseriousviolationoftherightsofvideositesthathavelegallyprocuredcontent,"saidZhouLin,DeputyTechnologyDirectorwithSohu.
BaiduisalsoprovidingaccesstoroguevideositesthathostpiratedcontentanddonothaveanofficiallicensetooperateinChina,thegroupclaimed.
Baidusaiditdevelopedascreeningsystemtofilterpiratedvideosandopeneda24-hourchanneltoreceivepiratedvideoreportsorcomplaints.
However,YaoJian,CEOofYoukuTudou,saidhiscompanyhasmadereportstoBaidu,butnothingchangedandpiratedcontentwasstillrampantonline.
Tobeabletoprovidehighqualitycontenttotheenduser,majorlegitimatevideositeshavemadehugeinvestments.
CharlesZhangofSohusaidthepriceofTVdramasjumpedtoCNY1millionperepisode,fromzeroafewyearsago.
WeibooperatorSinamorethandoublesprofitSina,operatorofChina'smostpopularmicrobloggingsiteWeibo,morethandoubleditsthird-quarternetprofitfromlastyearafterthesite'sincomegrewstronglyasmorevendorschosesocialnetworkingsitestobetterengagewithconsumersandmarkettheirproducts.
Sina'snetearningsjumped157%toUSD25.
4millionandsalesincreased21%toUSD185million.
WeibocontributedUSD43.
7millionofthesales,morethandoublefromlastyearandalso46%higherfromthepreviousquarter.
Totaladvertisingincomegained26%toUSD151.
6million.
EarlierthisyearSinareachedaUSD586milliondealforAlibabatobuyan18%stakeinWeibo.
ThedealisexpectedtoyieldUSD380millionofrevenueinthenextthreeyears.
Separately,Tencent,China'slargestinternetcompanybymarketvalueandoperatorofthepopularWeChatsmartphonechattingapplication,saidearningsinthethirdquarterincreased20%fromayearagotoCNY3.
87billion.
Itsrevenuejumped34%toCNY15.
5billion,thecompanysaid.
Advertisingrevenueclimbed26%toUSD151.
6million.
Thecompanyforecastfourth-quarternon-GAAPrevenueofbetweenUSD190millionandUSD194million,includingUSD160milliontoUSD162millionfromadvertising.
IMappMomomorepopularthanFoursquareMomo,apopularinstantmessagingappinChinasaidtobepopularamongthoselookingforone-night-stands,nowhas80millionusers,accordingtoCEOTangYan.
Some13millionpeopleuseMomoeveryday,generatingadailyaverageof500millionmessages,accordingtoTang.
TheapplicationwaslaunchedinAugust2011.
DemonstratingthepowerofoperatingintheChinesemarket,MomoboaststwiceasmanyusersasFoursquare,asimilarapplicationpopularoutsideChina.
FoursquarewaslaunchedtwoyearsbeforeMomoandisavailablein12languages.
Momoisalocation-basedinstantmessagingapplicationforsmartphones.
Userscanconnecttopeoplenearbyandsharefreetexts,audionotesandphotographsovertheinternet.
Momoseeksto"changethefutureofmobileinteractions",Tangsaid.
Theappgained10millionusersinitsfirstyearandthisyearhasbeenparticularlysuccessful,addinganextra50millionuserssinceMarch.
MomowasfoundedinMarch2011byfourBeijingerswhohadpreviouslyworkedattwoofChina'sbiggestinternetportals,SinaandNetease.
Tangdidnotmakepublicanyinformationaboutrevenueandprofitbutsaid,"Wearenotindebt".
FCCCIT&TelecomNewsletterNo84,November28,2013Page9NQMobile'sprofitmorethandoublesinQ3NQMobile,theChinesemobile-servicesproviderthatMuddyWatersaccusedofinflatingrevenue,postedthird-quarterprofitthatbeatanalysts'estimatesassalesofgameandsecuritysoftwarerose.
NetincomemorethandoubledtoUSD17.
4millioninthethreemonthstoSeptemberfromUSD8.
13millionayearearlier.
NQMobilesharesclosedinNewYorkonNovember26up6%atUSD14.
31,butarestilldownabout40%sinceOctober24,whenMuddyWaters,theresearchfirmfoundedbyshortsellerCarsonBlock,gavethecompanyastrongsellrating,sayingitinflatedsalesandmisrepresentedcashbalances.
NQMobile,whichhasheadquartersinBeijingandDallas,deniedtheallegations.
OnNovember6,itsaiditcompletedthetransferofUSD103millionincashtoanaccountatStandardCharteredtoshowithadamplereserves.
Salesinthethirdquarterrose110%toUSD54.
2million,NQMobilesaid.
NQMobileforecastrevenueforthefourthquarterofasmuchasUSD63million,morethanthemeanUSD61.
2millionestimateoffiveanalysts.
ThatwouldbringsalesforthisyeartoasmuchasUSD192million,thecompanysaid,themostonrecord.
RevenuegrowthslowsatTencentTencent,China'slargestlistedinternetcompany,postedthelowestrevenuegrowthinsixyearsinthethirdquarterwhilenetprofitmissedexpectations,weigheddownbyinvestmentsinitsmobileande-commercebusinesses.
TheShenzhen-basedcompanyreporteda34.
3%year-on-yearjumpinquarterlyrevenuetoCNY15.
5billion.
Netprofitrose20%toCNY3.
87billion.
SinceTencentlaunchedinAugustitslatestversionofWeChat,whichisconnectedtoanonlinepaymentservice,investorshavebeenhopingthefirmwillstartmakingprofitsfromitsmobilemessagingapplication.
XueYongfeng,AnalystatAnalysysInternational,estimatesthegamesontheWeChatplatformwillcontributeCNY1.
5billiontoCNY2billionthisyear.
Tencentsawrevenuefromsocialnetworks,includingWeChatandQQ,grow3.
7%year-on-yearinthequartertoCNY3.
2billionanda124%increaseinthenumberofactiveusersofWeChatto271.
9million.
Sellingandmarketingexpensesincreased79%toCNY1.
47billionfromthethirdquarteroflastyear.
Onlinegames,whichcontributed75%ofthecompany'stotalrevenue,rose24.
9%toCNY11.
6billion.
E-commerceincomemorethandoubledtoCNY2.
36billionfromCNY1.
13billion.
Tencenthasexpandedintoe-commercewithplatformsincludingbusiness-to-customerYixun.
comandPaipai.
com,rivallingAlibabaGroup.
OnlinecurrencyBitcoinisboominginChinaBitcoin,theunofficialonlinecurrency,isboominginChina.
Aco-founderofChina'sbiggestbitcoinexchangesaidtherewere"boundlessopportunities"forthedigitalcurrencyinthecountrybecauseoftheChinesesavingethic.
"ThemainreasonwhyBitcoinhasbecomebiginChinaisbecauseChinesepeoplearesavers,andmorepeopleareseeingBitcoinasawaytostoreandinvesttheirmoney,"LinkeYang,VicePresidentofBTCChina,toldreportersonthesidelinesofaconferenceinSingapore.
Bitcoins,aformofdigitally-created'e-money'whichisstoredinavirtualwalletandbypassesbanks,allowinguserstoremainanonymous,havesoaredinvalueinrecentmonths.
Theywerecreatedin2009intheaftermathoftheglobalfinancialcrisisbyananonymousprogrammerwhowantedacurrencyindependentofanycentralbankorfinancialinstitution.
YangattributedthesharpriseinChinesedemandforbitcoinstoadocumentarybroadcastonstate-runCCTV,aswellasincreasedacceptanceofthecrypto-currencyasaninvestmentinstrument.
OtherparticipantsattheBitcoinSingaporeconferenceechoedYang'sbullishnessonthedigitalcurrency'sprospectsinChina.
InvestorshoweverarecloselywatchingtoseeifChina'sgovernmentwillplacespecificrestrictionsonBitcointrading.
HundredsofChineseinvestorswereleftwithmorethanCNY20millionincombinedlossesafterGlobalBondLimited,aBitcointradingplatform,suddenlyclosedinOctober,theSouthChinaMorningPostreports.
"Taobaovillages"reapingriche-commerceharvestInsomevillagesinChina,includingWantouvillageinShandongprovince,Taobaoonlinestoreshavebeenproliferating.
OnenteringWantou,rowafterrowofcouriershopsemergeandwi-fisignalsinstantlyappearonsmartphones.
StoreownerMaYaofei,28,runsanonlinestoresellinghand-wovencraft,includingstraw-madechairs,tables,casesandsmalldecorativeitems.
HemovedfromDongyingcitytoWantou2yearsagoandsetuphisshopthere.
Wantou,crowneda"TaobaoVillage",ishometomorethan500onlinestoresonTaobaoMarketplace,Alibaba'spopularconsumer-to-consumer(C2C)onlineshoppingplatform.
Masaidtheinternetallowshimtoreachouttotheoutsideworld.
Hisonlinestore'ssalesareFCCCIT&TelecomNewsletterNo84,November28,2013Page10CNY3,000toCNY4,000perdayandhisproductsaresoldacrossthecountry.
"Thisyearinourvillage,salesincreasedby30%to40%fromlastyear,"Masaid.
Butnowcompetitionisincreasingastoomanyvendorsrushedinafterseeingthesuccessoftheonlinebusiness.
Almostallhouseholdsthatdobusinesshavelinkedtheirrealstorestovirtualshops.
Wantouisjustoneof14TaobaovillagesinChina.
AlibabadefinesaTaobaovillageasaoneinwhichmorethan10%ofhouseholdsrunonlinestoresandvillagee-commercerevenuesexceedCNY10millionayear.
Bytheendoflastyear,morethan1.
63millionTaobaostoreswereregisteredinruralareas,withtotaltransactionsfromthe14TaobaovillageshittingCNY5billionlastyear,accordingtoAliresearch.
Importantlyithasliberatedfarmersfromthefieldandcreatednewjobsforcouriers,driversandonlineshopdesigners.
Evensomeuniversitygraduatesarenowmovingbacktothevillagestooperateonlinestores,theSouthChinaMorningPostreports.
MobilepaymentmarketgrowingstrongMoreconsumersaremakingpaymentsviamobiledevicesandthesizeofthemarketisexpectedtoexceedCNY800billionthisyear,morethanfivetimesthevolumein2012,accordingtoareportbyaresearchgroupheadedbyBaShusong,AnalystwiththeDevelopmentResearchCenteroftheStateCouncil.
Lastyear,535millionpaymentsweremadethroughmobilephoneswiththetransfervolumeatCNY2.
31trillion,ayear-on-yearincreaseof116%and132%,respectively.
In2013,onethirdoftransactionsonAlipayweremadethroughphones,astaggeringjumpofover800%fromayearearlier.
OnlineshoppingsurgedinthethirdquarteroftheyearwithtransactionstotalingCNY454.
76billion.
Thefigurewasa42.
4%year-on-yearincrease,accordingtoiResearch.
Twofactorscontributedtothesurgingtrend,onlineshoppinginthirdandfourthtiercitiesandbettermarketingbye-businessfirms,saidthereport.
Business-to-customer(B2C)platformscoveredabout36.
6%oftheonlineshoppingtransactionvolume,up5.
6percentagepointscomparedwiththethirdquarterlastyear.
Onlineretailissettoaccountforatleast10%oftotalretailsalesby2015,theMinistryofCommerce(MOFCOM)said.
E-commerceisalsolikelytoaccountforover10%ofimportsandexportsby2015.
ThesizeofChina'se-commercemarketwillcontinuetogrow32%annuallyinthenextthreeyearsandisexpectedtobe50%biggerthantheU.
S.
in2015,consultantBain&Companysaidinitsannual"ChinaE-commerceReport"earlierthisyear.
SupremeCourthearsfirstwebanti-monopolycaseTheSupremePeople'sCourtheardthecountry'sfirstinternetanti-monopolycaseinwhichQihoo360TechnologyCo,aleadinganti-virussoftwaredeveloper,accusedTencentof"abusingitsdominantmarketposition".
ThisisQihoo'ssecondlawsuitagainstTencent.
OnMarch28,theGuangdongHighPeople'sCourtruledthatTencentwasnotinviolationoftheAnti-MonopolyLawandrejectedQihoo360'smonopolyclaims.
AttorneysforQihoo360claimedthefirsttrialwasheldunfairlyandthatthetopcourtshouldrejecttheMarch28verdict.
Qihoo360claimsithaslostCNY825millionbecauseofTencent'sabuseofitsdominantmarketposition.
ItisseekingCNY150millionincompensation.
Qihoo360claimsTencenthasanearly90%shareinthedomesticinstantmessagingservicemarketandalsosaidnoneofTencent'scompetitorshavemorethana5%marketshare.
TencentcounteredbysayingthatQihoo360lackstheevidencetosupportitsclaims.
Itsaidthe90%marketshareisnotbasedoncommercialrevenuesbutonthelengthoftimeusersspendonTencent'sinstantmessagingservice.
Qihoo360claimsTencentalsoabuseditsdominantpositionbyforcinguserstochoosebetweenthetwocompanies'services.
ItpointstoTencent'sannouncementonNovember3,2010,thatitwouldshutdownitsQQinstantmessagingserviceoncomputersthathadinstalledsecuritysoftwarebyQihoo360,theChinaDailyreports.
GoogleChairmanEricSchmidtbrieflyvisitedChinaattheendofOctoberandcheckedoutcounterfeitgoodsinBeijing'sZhongguancunhigh-techarea.
Schmidt'sentourageincludedtwoformerGoogleexecutives,LinBinandHugoBarra,whonowworkforXiaomi,raisingspeculationaboutpossiblecollaborationbetweenthetwocompanies.
Google'sAndroidfreeoperatingsystem(OS)powersmostofXiaomi'ssmartphonesanditsnewsmartTVproduct.
ItwasSchmidt'ssecondvisittoBeijingthisyear.
GoogleisrumoredtopreparethelaunchitsNexusphoneinChinanextyear.
Therearecurrentlymorethan2,500sextoycompaniesusingtheAlibabae-commerceplatformandnearly50%havenomorethan10staff.
Manycustomersprefertobuysextoysonlinebutsomecomplainthatthehigherqualitytoysareallexportedleavingthedomesticmarketfloodedwithinferiorproducts.
FCCCIT&TelecomNewsletterNo84,November28,2013Page11Telstra,Australia'sleadingtelecommunicationsandinformationservicescompany,istolistitsmajority-ownedChineseinternet-basedbusinessAutohomeontheNewYorkStockExchange(NYSE).
AutohomeistheleadingonlinedestinationforcarbuyersinChinaandoneofTelstra'sstrategicinvestmentsinAsia.
TelstrahasrecentlyincreaseditsshareholdinginAutohomefrom66%to71.
5%aheadoftheplannedlisting.
NetprofitofCtripInternational,aChineseonlinetravelbookingcompany,surged92%inthethirdquartertoCNY373millionassalesoftravelpackagesandhotelbookingsboomed.
ItssalesinthethreemonthsendedonSeptember30jumped34%toCNY1.
64billion.
PackagedtourscontributedCNY320milliontonetincomeduringthethreemonths,a43%jumpfromayearago.
Theriseinsaleswasdrivenbya40%surgeinhotelreservationsanda26%jumpinairticketbookings.
TarenaInternationalispreparinganinitialpublicoffering(IPO)afterhiringNQMobile'sformerChiefFinancialOfficerJiSuhai.
Tarena,whichprovidestrainingforsoftwareengineers,wastargetingasharesaleforasearlyasnextyear.
TarenahiredJiinpartbecauseofhisinvolvementinNQ'slistingontheNewYorkStockExchange(NYSE).
SharesofNQhaveplummetedrecentlyafteradamagingreportbyshort-sellerMuddyWatersallegingthatNQfakeditssalesfigures.
AlibabaGroupChairmanJackMahasupsetsomeofChina'swealthiestrealestatetycoonsbypledginginaCCTVtalkshowtodrivedownthesoaringpriceofhousingwith"thepowerofe-commerce".
PropertytycoonswrotedamningresponsestoMainatit-for-tatverbalexchangeonline,withsomedescribingtheonlineentrepreneuras"delirious".
EarlierMahadaccusedtax-evadinge-businessesofacting"immorally".
Whilesomereadersagreedwiththetycoons,manychampionedMaasaheroandslammeddevelopersascallousandgreedy.
AlibabaGroupwillinvestuptoCNY500millionbytheendofthisyeartohelpthe7millionvendorsonitsTaobaomarketadapttothemobileinternetera.
VendorswillalsobeoffereddiscountedservicepackagesandbegivenfreesmartphonesthatrunontheAliyunoperatingsystemandallowthemtoaccessAlibaba'sordermanagementsystem.
WuYongming,Alibaba'sSeniorVicePresident,saidmanyonlineshoppershavemigratedtomobiledevicesfromdesktopcomputersandsmartphonesareboundtobecomeoneofthemajorshoppingchannelsforconsumers.
TheinvestmentispartofAlibaba'snew"AllIn"strategy.
Indiaishometothesecond-largestnumberofsuppliersonAlibaba.
comafterChinaitself,accountingfornearlyatenthofthebusiness-to-business(B2B)platform'sglobaluserbase.
MembershipnumbersinIndiahaverapidlyincreasedovertheyears,witha22%riselastyear.
Chinesebuyersmakeupjust4%ofcustomersofIndiansuppliersonAlibaba.
com.
Indiansthemselvesaccountfor21%,followedbyU.
S.
buyers,at12%.
BaiduFounderRobinLihasbecomeChina'ssecondrichestpersonthankstoa63%riseinBaidu'ssharepricethisyear.
Li'snetworthhasrisentoUSD12billion.
NearlyallofLi'swealthstemsfromhis20.
8%stakeinBaidu.
BaiduisChina'ssecond-largestinternetcompanybymarketvalueafterHongKong-listedTencent,whoseChairmanMaHuatenghasanetworthofUSD10.
8billion,makinghimChina'sfourth-richestman.
TheSupremePeople'sCourt(SPC)hassetupitsownaccountsonSinaWeiboandWeChat,twoofthecountry'sleadingsocialmediaplatforms.
TheSPCsaidthemovewasaimedatbuildinganinternetplatformforjudicialtransparencyandpublicservicetoincreaseinteractionsbetweenthecourtsandthepeople.
ImportanttrialinformationfromtheSPCandlocalcourts,judicialinterpretations,andkeydocumentswillbereleasedontheWeiboandWeChataccounts.
Guangdong,HongKongandShanghaiarerankedasthetopthreee-retailexporthubsinChinaaccordingtoeBay'sreporttitled"2013GreaterChinaRetailExportIndustryLandscape".
ThetopthreearefollowedbyZhejiang,Beijing,Taiwan,JiangsuandFujian.
ThereisalsoanincreasingnumberofeBaysellersininlandprovinces,representedbyHubei,HebeiandHenan.
Electronics,fashion,andhomeandgardenarethethreelargeste-retailexportcategoriesbygrossmerchandisevolume.
Computers,cellphones,accessories,clothing,jewelry,gemsandwatcheswerethemostpopularitems.
MobilenetworkoperatorThreeHongKonglaunchedanewmobiledatingservicelinkedtoTaiwanesemobileapplicationiPair.
TheiPartmentwebsiteandiPairappservicescreatedbypartnerSunFunInfoare"themostpopularsocialanddatingFCCCIT&TelecomNewsletterNo84,November28,2013Page12platformsinTaiwan",withmorethan4.
65millionregisteredmembers.
ONE-LINENEWSChina'shomegrownBeidouNavigationSatelliteSystemwillbeputintoitsfirstoverseasoperationinThailandearlynextyear.
TheWuhanInformationTechnologyOutsourcingServiceandResearchCenterandtheGeo-informaticsandSpaceTechnologyDevelopmentAgencyofThailandhaveagreedtostartbuildingamodelsatellitestationinThailand'seasternChonBuriprovince,thefirstBeidoufacilityoutsideChina.
Morethan1,000workersofHongKong-listedShenzhenASMMicroElectronicTechnologystagedaprotestoutsidethreeofthecompany'sfactoriesinShenzhenattheendofOctober,demandingbettertermsinarelocationplan.
Thecompanyistheworld'slargestmakerofmachinesandtoolsusedinthesemiconductorindustry.
TwoofthethreefactorieswouldberelocatedtoShenzhen'ssub-districtofLonggangandtoHuizhou,acitymorethan100kilometerstothenorth,attheendofSeptembernextyear.
Onlythoseemployeeswhoagreedtomovewouldkeeptheirjobs.
LenovohasinvestedmorethanCNY1billioninitsagriculturalarm,JoyvioGroup,whichwillcoverthecompleteindustrychainfromproductiontofoodprocessing,distribution,andretailing.
Afterlaunchingitsownbrandedblueberriesinthemiddleofthisyear,Joyvioannouncedthataround4,000tonsofgoldenkiwifruitfromitsfarmsnearChengduwillbeavailableinsupermarketsandonlinestores.
Thefruitwillbebranded"LiuKiwi"asatributetoChairmanLiuChuanzhi,whohasmastermindedtheshiftinthegroup'sfocustofood.
Overthepasttwoyears,JoyvioacquiredblueberryfarmsinQingdao,aswellasinChileinSouthAmerica.
IthasalsobecomethelargestkiwifruitplanterinChina.
China'stelecommunication,mediaandtechnology(TMT)industryattractedabiggershareoftheoverallprivateequity(PE)andventurecapital(VC)investmentinthefirsthalfofthisyearandmorefundsarelikelytobeinjectedinthesecondhalf.
Itsshareaccountedforanaverage59%inthefirstsixmonths,asharprisefromthe46%intheyear-earlierperiod,accordingtotheChinaMoneyTreereportbyPricewaterhouseCoopers(PwC).
Inthefirsthalfoftheyear,USD1.
65billioninventurecapitalfundswereinvested.
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beThisnewsletterisrealizedwiththesupportoftheFederalGovernmentofBelgium,theFlemishGovernment,theWalloonGovernmentandtheGovernmentoftheBrussels-CapitalRegion.
TheFCCCNewslettersareeditedbyMichelLens,whoisbasedinBeijingandcanbecontactedbye-mailmichel.
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