China: Local Companies Start Smartphone War Against Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG)

By Sterling Wong  SEP 21, 2012 4:15 PM

Sotheby's and CNOOC also make the news.


MINYANVILLE ORIGINAL Anti-Japan protests rocked parts of China this past week, as tensions over a territorial dispute between the two nations boiled over and threatened Japanese firms with business interests in the mainland. Japanese automakers such as Toyota (NYSE:TM), Honda (NYSE:HMC), and Nissan (PINK:NSANY) have already had production affected by the demonstrations.
“The repercussions for Japanese carmakers are very serious and will last for a long time,” Cui Dongshu, deputy secretary general of the Passenger Car Association, told Bloomberg. "There are plenty of choices. Why bother with Japanese brands if there are concerns of safety due to anti-Japan sentiment?” (See: For Japanese Automakers, China Dispute Might Be Worse Than Tsunami.)

Here is the rest of this week’s business news:
Chinese tech companies: Chinese tech outfits are waging a war against the likes of Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL). Inspired by the example of Amazon’s Kindle, which adapted an Android system with great success, Alibaba has launched its own mobile operating system, Aliyun, which is also based on the Android and customized for Chinese users.  
Meanwhile, Chinese phone maker ZTE, which is strong in the lower-end smartphone device market, publically critiqued the iPhone 5 for its lack of surprises.

"Right now, society is improving fast. If every year you only come out with one phone, I think at this speed it's not very suitable for the market," said ZTE executive vice president He Shiyou on Wednesday, according to ComputerWorld. He also said that while he was impressed with the new Apple device, he felt that public enthusiasm for it seemed muted compared to previous releases.

"The main reason is because in looking at the iPhone 5's hardware and functions, other handset vendors are already offering these features, or have phones with even better performance," he elaborated. "This reflects that Apple's product release speed is rather slow."
ZTE is also partnering with Mozilla to launch smartphones that will be powered by Mozilla’s mobile operating system, Firefox OS. The devices are expected to debut by early 2013.
CNOOC (NYSE:CEO): The deal for state-owned China National Offshore Oil Corporation, or CNOOC, to buy Canada’s Nexen Inc. (NYSE:NXY) for $15.1 billion took one step towards completion as 99% of Nexen shareholders approved of the takeover in a vote this week.
"Today's shareholder vote is one step in the transaction's approval process," said Kevin Reinhart, Nexen's interim president and chief executive, after the vote, according to the Wall Street Journal. "It's now in the (regulators') hands to assess the transaction.”
If approved by regulators, this will become the largest foreign acquisition ever by a Chinese company. Among the assets CNOOC would acquire in this takeover are production platforms in the Gulf of Mexico, the North Sea, and Nigeria, along with tar sands reserves in Long Lake, Alberta. Google: Three and a half years after launching its China-only music service, Google is shutting it down, the company announced in a blog post. The service, available at, will be up till October 19 for users to save their playlists, but all music streaming and downloading capabilities were suspended today.
In the blog post (in Chinese), Yang Wenluo, Google China's engineering research general manager, writes: "The impact of this product was not as high as we expected, so we decided to divert our resources to other products," according to Reuters
The world’s leading search engine had started its Google Music Search in China in March 2009 together with a local partner and had set its sights on competing with Baidu (NASDAQ:BIDU), which then was known for offering links to illegal mp3 downloads.
When Google had to move its Chinese site to Hong Kong over its refusal to comply to China’s censorship laws in 2010, the company’s share of the China search market took a sharp hit, which also affected the popularity of its music service. Meanwhile, Chinese users can now flock to Baidu, which has started a licensed music search called Baidu Ting.
Sotheby’s (NYSE:BID): Auction house Sotheby’s has announced plans to open its first-ever international auction house in China. The company is spending $1.2 million to acquire an 80% stake in a 10-year joint venture with state-owned Beijing Gehua Cultural Development Group. The venture, to be called Sotheby’s (Beijing) Auction, now awaits regulatory approval.
“China and its growing class of collectors has been the single most attractive growth market for the company,” Kevin Ching, CEO of Sotheby’s Asia, noted in a press release. Indeed, China’s art market has exploded in recent years, and in 2011, China was the largest art market in the world for a second consecutive year, participating in 41% of worldwide art sales.

Twitter: @sterlingwong
No positions in stocks mentioned.

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