Posts tagged ‘Apple Inc.’

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18/02/2016

Apple Pay takes on China’s internet kings in mobile payments | Reuters

Apple Inc launched its mobile payment system in China on Thursday in a bid to convince the hundreds of millions of users of the country’s entrenched, dominant services to switch.

Photo

“We think China could be our largest Apple Pay market,” Jennifer Bailey, vice president of Apple Pay, told Reuters in an interview in Beijing.

In an early boost, China’s biggest lender, Industrial and Commercial Bank of China Ltd (ICBC), was among the banks that said earlier this week that customers would be able to use Apple Pay from Thursday.

However, Apple Pay has not had an easy ride so far in China, the fifth country to get the service. Even in its U.S. home market, Apple has faced skeptical retailers in its effort to develop a new revenue stream.

China is not likely to prove any easier to crack.

“People switch applications for significantly better experiences, it (Apple) has to deliver not just a little bit more secure, or a little bit easier to use,” said Mark Natkin, founder of Marbridge Consulting.

Greater China is Apple’s second-largest market by revenue, and the world’s biggest smartphone market. By the end of 2015, 358 million people, more than the U.S. population, had already taken to buying goods and services by mobile phone, according to the China Internet Network Information Center.

The vast majority are using payment services from China’s two biggest Internet companies that have existed for years.

Social networking and gaming firm Tencent Holdings Ltd operates WeChat Payment, and e-commerce company Alibaba Group Holding Ltd, through its Internet finance affiliate Ant Financial Services Group, runs Alipay.

“With 100 percent saturation of local payment systems, no one in China is clamoring for Apple Pay,” said one retailer who declined to be named for fear of harming business prospects. “Today, everyone has a local payment option on their phone, so Apple Pay is a solution in need of a problem.”

Source: Apple Pay takes on China’s internet kings in mobile payments | Reuters

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27/01/2016

With China weakening, Apple turns to India | Reuters

As China sales show signs of cooling, Apple Inc (AAPL.O) is touting India’s appetite for iPhones, betting that rising wages and an expanding middle class will pull consumers away from the cheap alternatives that currently dominate the market.

In an earnings call in which the company reported meager iPhone growth and forecast its first revenue drop in 13 years, the Indian market stood out as a rare bright spot for Apple.

Sales of the company’s flagship smartphone climbed 76 percent in India from the year-ago quarter, Apple Chief Financial Officer Luca Maestri said.

According to data compiled by Counterpoint Technology Research, Apple sold an estimated 800,000 iPhones in India in the fourth-quarter, its highest ever amount but one that is a fraction of the 28 million smartphones sold during that period.

Growth in India is a tantalizing prospect as Apple grapples with the economic downturn in China, its second largest market. While revenue in Greater China rose 14 percent in the last quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Maestri told Reuters in an interview.

But with nearly 70 percent of smartphones selling for less than $150 in India, Apple’s high-end phones remain out of reach of most consumers. The basic iPhone 6S sells at just under $700 in India, or nearly half the average annual wage.

“In many ways India is very similar to what China was a few years ago, but the middle class here is still very small and it can be two to three years before Apple gets a similar level of success in India,” said Counterpoint Technology Research analyst Tarun Pathak.

Apple CEO Tim Cook struck a more optimistic note, saying the company was “increasingly putting more energy” into India, citing a largely youthful population with rising disposable income as more people join the workforce.

With faster 4G coverage expanding, Apple has already asked Indian government for a license to set up its own retail stores just as the market seems to be turning in its favor.

As in China, Apple products are a coveted status symbol in India, a market that analysts say is likely to overtake the United States next year to become the world’s second largest smartphone market. “The love for the iPhone is there,” said Carolina Milanesi, chief of research and head of U.S. business at Kantar Worldpanel ComTech, a consumer research firm.

Source: With China weakening, Apple turns to India | Reuters

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20/01/2016

Apple seeks nod to open India stores amid concerns of slowing sales growth | Reuters

Apple Inc has applied to set up its own stores in India, one of the world’s fastest growing smartphone markets, as the iPhone-maker looks to tap new opportunities amid worries of slowing growth in its main markets.

An Apple logo is seen inside the Apple Store in Palo Alto, California November 13, 2015. REUTERS/Stephen Lam

Apple sells its iPhones, iPads and Macs in India through third party resellers, and industry analysts estimate that the Cupertino, California-based company has less than a 2 percent share in India’s smartphone market, dominated by cheaper brands.

The company has filed an application with India’s Department of Industrial Policy and Promotion to open its own stores, Amitabh Kant, secretary at the federal trade ministry unit told Reuters.

Apple also confirmed the application filing, but declined to give details.

Its expansion plans in India come at a time when concerns about slowing growth in the United States and China, the world’s most important market for smartphones, have weighed on the company’s stock in the last few months.

Shares in Apple, the world’s most valuable company by market value, are down 28 percent from their peak in April last year. The company operates more than 450 stores in 18 countries. Chief Financial Officer Luca Maestri told Reuters in October that Apple had 25 stores in China and was opening a new one roughly every month.

Its plans for India have been held back due to restrictions on foreign investment in the retail industry, which require single brand overseas retailers to buy close to a third of the goods sold at their stores from local producers.

Apple representatives held talks with Indian government officials about a relaxation of the 30 percent local-sourcing norms before filing the application, said a source familiar with the company’s plans.

Apple’s plans come against the backdrop of initiatives unveiled by Indian Prime Minister Narendra Modi, who met with Apple chief Tim Cook during his U.S. visit last year, to boost foreign investments in India.

In November, the government eased foreign investment norms in 15 major sectors, including relaxing the mandatory local-sourcing rule for foreign single-brand retailers in the case of “cutting-edge technology” products.

Kant said his department would examine Apple’s application in view of the changes made for local sourcing.

For years, India has been a low priority market for Apple as spending power is weaker than in China, where the company’s iPhones swiftly became must-have devices after their 2007 launch.

But Apple is now looking to boost its market share in India’s rapidly growing market, and the company’s recent growing spend on advertising in the country has indicated an aggressive campaign to sell more.

India is likely to overtake the United States to become the world’s No. 2 smartphone market in 2017, according to research firm Strategy Analytics. The local smartphone segment is dominated by Samsung Electronics and India’s Micromax.

Source: Apple seeks nod to open India stores amid concerns of slowing sales growth | Reuters

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02/12/2015

China Road Rage Cases Top 17 Million So Far in 2015 – China Real Time Report – WSJ

Chinese police attributed 80,200 traffic accidents in 2013 to road rage, and the number rose by 2.4% in 2014. Men account for 97% of road rage incidents, official data show.

No Caption Available.

China is a notoriously dangerous place for driving in general. The World Health Organization has estimated that 261,000 people died on China’s roads in 2013. Chinese government data show that last year 1,895 people died in traffic accidents when crossing roads, and 4,180 people died between 2011 and 2014 on public buses that were speeding or overloaded.

Yet when it comes to the surge in road rage, experts point to a range of possible explanations. One is that the rapid development of China’s car market has led the country’s roads to become increasingly crowded, creating frustration and anger on the streets. Sociologists also link road rage to general anxiety and fickleness, one of the side products of China’s rapid economic growth — and its accompanying social pressure — over the past three decades.

In China, the total number of vehicles has increased by more than 18 million cars for each of the past five years. As of the end of October, China had 169 million autos, according to Ministry of Public Security statistics, next only to the U.S.’s 240 million. The number of license-holders has risen even more quickly; since 2010, China has added more than 20 million new drivers each year. Now one in five Chinese has a license.

The country’s infrastructure has struggled to keep up. Data from the Ministry of Public Security show that 35 Chinese cities now have more than one million automobiles. Ten of those cities — including Beijing, Chengdu and Shenzhen – each have more than two million cars on the road. But while the number of China’s motor vehicles and drivers has each risen more than 20-fold since 1987, the country’s road capacity has increased only 3.4 times over the same period.

The rash of new drivers is also posing safety hazards. The official Xinhua News Agency cited a spokesman from the Ministry of Public Security as saying that drivers with less than one year of experience play a large role in traffic accidents. To be sure, China has some safety regulations in place. For example, drivers and front-seat passengers are required to wear seatbelts, and the use of mobile phones while driving is prohibited. But these laws are often ignored in practice. Distracted driving – operating a vehicle while texting, talking on the phone, watching videos, eating or reading – contributed to more than a third of fatal traffic accidents in 2014, causing 21,570 deaths, the Ministry of Public Security said.

Chinese authorities are working to counter the trend. In the past month, the Ministry of Public Security launched a public education campaign on road etiquette after several high-profile cases of road rage violence this year. It advocated against dangerous driving behaviors including street racing, drunk driving, aggressive driving and blocking emergency lanes.

Source: China Road Rage Cases Top 17 Million So Far in 2015 – China Real Time Report – WSJ

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24/08/2015

Are the Best Days Over for China Tech Startups? – China Real Time Report – WSJ

Over the past year, China has seen a boom in its startup scene, thanks to plenty of capital flowing into the sector.

But some investors and entrepreneurs say that could be changing as Beijing struggles to restore confidence in its economy and faltering stock market.

In Shenzhen, hundreds of entrepreneurs and investors gathered on Sunday at an event called Big Salad, where local startups talked about their business ideas, including high-tech underwear and affordable smart glasses. Everyone was full of enthusiasm and the mood was upbeat throughout, but some of them were also bracing for tougher times.

“Raising new money is difficult now,” said Mosso Lau, vice president of Shenzhen-based Firebird Institution, which runs funds that invest in early-stage startups while also serving as an incubator that helps startups develop their business ideas.

Firebird set up its last investment fund two years ago by collecting 12 million yuan ($1.9 million) from local businesses and wealthy individuals. It invested that money in tech startups such as mobile apps for food delivery and massage services.

As Firebird is now preparing to set up a new fund for next year, Mr. Lau expects it will be a lot harder to collect money this time, because potential investors have been hit by the recent stock market turmoil. “From last year until this June, there was so much money in venture investment. It was unusual,” he said.

Last year, venture-capital investments in China’s tech sector more than doubled to $6 billion from $2.8 billion in 2013, according to Hong Kong-based AVCJ Research, with both foreign and domestic funds putting in more money than the prior year. Total early-stage funding for Chinese tech startups surged to nearly $2 billion last year from $313 million in 2012 as deals increased to 299 from 172, according to AVCJ.

In January, when Jerry Dai founded a startup in Shenzhen that operates a crowdfunding platform similar to Kickstarter, there was nothing but optimism.

Entrepreneurs around him who had already raised capital told Mr. Dai that fundraising for his new venture wouldn’t be a problem because angel investors — individuals or funds that provide capital for early-stage startups before formal investment rounds — were financing just about any business idea.

But now, just as his startup is trying to find an angel investor, things are looking tougher.

“There are still many angel investors, but they are getting more selective,” he said. “Some investors think there is a bubble in China that may break in one or two years.”

Mr. Dai said he expects the process of securing funds to take longer than it would have several months ago.

“Last year was crazy. There was so much money in China,” said Heatherm Huang, a cofounder of MailTime, which makes emails easier to use on smartphones. Even though his startup is based in San Francisco, it raised much of its early funds from Chinese investors. “In some ways, things are going back to normal now.”

via Are the Best Days Over for China Tech Startups? – China Real Time Report – WSJ.

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20/08/2015

What Stands in the Way of Modi’s Digital India – The Numbers – WSJ

Indian Prime Minister Narendra Modi has grand plans to expand the reach of the Internet to his country’s most far-flung citizens.  But some big numbers stand in his way.

1.06 billion

The number of Indians who currently don’t have access to the Internet. India’s offline population is greater than that of China and Indonesia–home to the next two largest unconnected groups–combined.

1 million

The number of miles of fiber optic cable needed to connect 250,000 village clusters in India to the Internet, according to a committee set up to get the project into gear. The original plan estimated that 370,000 miles of cable would do the job.

1%

The proportion of clusters of villages that up to June 30 were fully connected to Internet services in community centers, hospitals and schools under the National Fiber Optic Network that was launched in 2011.

2013

The original deadline for completion of the network. The date has since been shunted back twice and now stands at 2019.

$11.2 billion

The revised budget for the fiber optic network. Almost four times what was originally planned.

via What Stands in the Way of Modi’s Digital India – The Numbers – WSJ.

Posted in Economics, India alert, Internet, Technology | 3 Comments »

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12/08/2015

India’s Smartphone Market Is Booming – Especially at the Low End – India Real Time – WSJ

Xiaomi Corp., which announced Monday that its some of its phones are now being assembled at a factory in India, isn’t the only Chinese smartphone maker with its eye on the subcontinent.

With the Chinese economy slowing and demand for smartphones picking up in India, Chinese handset makers including Lenovo Group Ltd.0992.HK +1.70%, Huawei Technologies Co. and Gionee Communication Equipment Co.  are looking to produce and sell more phones in the world’s second-most-populous nation.

But Indian consumers prefer cheaper phones than their Chinese counterparts. Roughly half of smartphones sold in India for the three months ended in June cost less than $100. In China, these low-end smartphones accounted for about 20% of the market over the same period, according to research company International Data Corp. IDC predicts the average selling price of Indian smartphones will fall to $102 in 2018 from $135 in 2014.

The $100 Galaxy J1 and other inexpensive handsets drove sales for Indian smartphone market-leader Samsung Electronics Co.005930.SE 0.00%, helping to increase its share of sales to 23% of the smartphones sold during the quarter ended June 30. In other markets, including China, sales are driven by its flagship Galaxy S6 and Galaxy S6 Edge, which sell for around $600 and $700, respectively, in the U.S.

Smartphone penetration is growing rapidly. While Internet penetration levels in India resemble China’s numbers from six years ago, smartphone penetration is only four years behind, according to a Credit Suisse report. The skyrocketing growth has even caught the attention of Apple Inc.AAPL -5.49%, which recently started offering financing to make its iPhones more accessible to Indians.

That might be bad news for smartphone manufacturers who operate on already razor-thin margins, but it’s potentially good news for Indian consumers and the Indian economy.

It also helps explain why contract manufacturing giant Foxconn says it intends invest billions of dollars setting up factories in India, and why Xiaomi recently announced its first made-in-India smartphone, the $107 Redmi 2 Prime. Changes to tax rules now make it cheaper to manufacture electronics in India. It also shortens the supply chain, meaning phone-makers can get their products to consumers faster and reduce inventory costs.

via India’s Smartphone Market Is Booming – Especially at the Low End – India Real Time – WSJ.

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10/08/2015

5 Things to Know about Foxconn’s Overseas Ambitions – WSJ

Foxconn, Apple Inc.’s major assembler, has signed a preliminary deal with India’s Maharashtra state to invest $5 billion in factories and research facilities in coming years. But the company, officially known as Hon Hai Precision Industry Co., has a history of making ambitious statements and floating investment ideas that haven’t materialized. Here are five things to know about Foxconn’s overseas ambitions.

Deutsch: Foxconn Logo

Deutsch: Foxconn Logo (Photo credit: Wikipedia)

1 India isn’t its first billion-dollar bet

In 2011, Foxconn agreed to invest $12 billion in Brazil to create a new supply chain that it had hoped will generate jobs. But four years later, Foxconn’s investment in Brazil has been much smaller than the pledged amount. It is still struggling to improve the manufacturing operations at its plants for iPhones and iPads there citing its inefficient labor force. The company has also been in talks for a new plant investment in Indonesia for years.  The Indonesian government once said that Foxconn would invest up to $10 billion, but plans remain in limbo due to political snags.

2 Why India?

While China remains the world’s largest smartphone market by shipments, India has the biggest growth potential for the next 5 years, says Bernstein analyst Mark Li. India recently raised taxes on mobile phones imported to the country to 12.5% from 6%, spurring global handset makers to look at ways to manufacture devices locally.

3 Sign of shift in manufacturing to India from China?

Analysts say it is unlikely that India will overtake China to become the company’s main production base in the next few years as China has an well-established supply chain ecosystem. India still lacks good infrastructure and favorable tax and labor policies, making it a less attractive destination for tech manufacturing.

4 Foxconn Chairman Terry Gou always aims for the best deal

The agreement with the Indian government is non-binding. Foxconn Chairman Terry Gou usually gives a rosy picture about the company’s potential investments when he negotiates with government officials. But only a few investment plans materialize as he wants favorable terms including big tax incentives and free land that most governments can’t accommodate.

5 Foxconn seeks other investment opportunities in India

The company and Chinese e-commerce giant Alibaba Group Holding Ltd. are in talks to jointly invest about $500 million in Snapdeal.com, a five-year-old Indian e-commerce startup. The deal would give Foxconn a retail foothold in India where it has experienced booming demand for smartphones. Foxconn is also setting up a new production site for Chinese smartphone maker Xiaomi Corp. in India.

via 5 Things to Know about Foxconn’s Overseas Ambitions – WSJ.

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28/07/2015

Apple ‘fake factory’ raided in China – BBC News

A factory which allegedly made up to 41,000 fake Apple iPhones has been raided in China, with nine arrests.

iphone 6

The operation reportedly involved “hundreds” of workers repackaging second hand smartphone parts as new iPhones for export, with counterfeit phones produced worth 120m yuan ($19m).

The factory was discovered on 14 May but was revealed on social media by Beijing’s public security bureau on Sunday, according to reports.

The operation was set up in January.

It was led by a husband and wife team, on the northern outskirts of the Chinese capital, according to Beijing authorities.

They said they had been alerted to the factory by US authorities which had seized some of the fake phones.

The reports come amid an official Chinese crackdown on counterfeit goods, with authorities pushing firms to trademark their goods.

China has also agreed to work with the US authorities to try to stem the large quantities of fake goods flowing between the two countries.

The discovery of the factory comes four years after fake Apple stores were found in Kunming city, China.

Discovered by blogger BirdAbroad, the fakes were so convincing she said many of the staff themselves were convinced that they were employed by the US electronics firm.

via Apple ‘fake factory’ raided in China – BBC News.

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13/07/2015

Under a Cloud: Outlook for India’s Outsourcers Looks Gloomy – India Real Time – WSJ

Investor fears that growth in India’s outsourcing industry is slowing down appear all but confirmed.

Tata Consultancy Services Ltd., India’s biggest outsourcer by revenue, reported its first results for the fiscal year of 2016 late last week.

The Mumbai-based company met analyst expectations, with a 12.9% rise in its first-quarter net profit. A bigger concern is slowing sales growth, a sign that the company is finding it harder to grow its business. Tata’s revenue grew by 3.5% in the three-months through June, down from 5.5% growth over the same period the previous year.

The slowdown spooked investors: TCS is an industry bellwether.

After the results, Tata’s shares closed down 2% on Friday, below the benchmark S&P BSE Sensex that closed up 0.3%. Competitors Infosys Ltd. and Wipro Ltd. are set to report results next week.

Analysis by The Wall Street Journal of revenue and profit data from India’s top-three outsourcing firms since March 2014 shows that TCS is not alone.

Other Indian firms are also not just struggling to return to the lightning growth they experienced in the ‘90s, they are moving further away from it.

With the exception of the three-month period ending September 2014, when the weakening rupee helped boost their bottom lines, revenue and net income at TCS, Wipro and Infosys has been slowing, data showed.

All three have seen their revenue growth since March 2014 turn south.

So what’s behind the deceleration?

One reason: a change in the way multinationals spend on technology.

In the past two years, many firms have resumed spending on technology after cutting back in the wake of the 2008 financial crisis, say Indian outsourcers.

Clients increasingly want solutions that use new technologies like data analytics software that help them analyze customer data or save on costs associated with procurement and logistics, and Indian outsourcers are not as good at this compared to their global competitors, say technology purchasing managers.

And, instead of employing large technology firms to run their back-end systems, the firms have increasingly signed up for pay-as-you-go services on the cloud—where servers and software are accessed via the Internet rather than on local networks or personal computers.

In the fight to regain ground, TCS is boosting its spending on digital technology, like big data, mobile app development and cloud computing.

On Thursday, for the first time, the company disclosed how much.  TCS said that it earned about $2 billion in revenue from digital technologies in the three months through June. That figure indicated that the Indian company was earning a small but significant part of its revenue from new technologies, including software that helps firms analyze social media or spending patterns for retailers.

In a further shift toward digitizing its business offering,  TCS will also train 100,000 people in digital technologies in the fiscal year 2016.

TCS Chief Executive N. Chandrasekaran said the Indian outsourcing giant would reach its target of earning more than $5 billion from digital technologies in the next four years. Revenue from this segment is growing at double-digits on a quarter-to-quarter basis, he said.

With its $4.08 billion in cash, left after paying huge dividends and industry-beating wage hikes, TCS could reach that target sooner than expected if it buys firms specializing in digital services, analysts say.

via Under a Cloud: Outlook for India’s Outsourcers Looks Gloomy – India Real Time – WSJ.

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