09/30/14

Permalink 01:44:11 pm, by dacare, 320 words, 51 views   English (US)
Categories: News of China

Lenovo closes purchase of IBM’s x86 server business

China's leading PC computer maker Lenovo Group Ltd announced Monday that it would close an acquisition of IBM's x86 server business on Wednesday for a purchase price of approximately $2.1 billion, an important move for the company to step into the global server market.

The acquisition will make Lenovo "the third-largest player in the $42.1 billion global x86 server market," according to a press release from Lenovo and IBM e-mailed to the Global Times.

Lenovo noted that it is buying IBM's x86 server business intact and is committed to following the IBM x86 product roadmap, including Flex and x86-based PureFlex integrated systems.

IBM will continue to provide maintenance delivery on Lenovo's behalf for an extended period of time, said Lenovo, without specifying a period.

The acquisition will enable Lenovo to extend its "capabilities in enterprise hardware and services," and make it "a strong number three in the global server market," Yang Yuanqing, chairman and CEO of Lenovo said in the press release.

The acquisition by Lenovo is an important step for the PC maker to extend its business globally, Xiang Ligang, president of cctime.com, a telecommunication news portal, told the Global Times. "It will be a new engine for Lenovo following its PC business."

Despite the fact that IBM's x86 server is low-end server, the acquisition, "which is just beginning for Lenovo to set foot in the server sector, will enable Lenovo to win more business clients globally," Xiang noted.

Lenovo acquired IBM's PC business, including the ThinkPad line of PCs, in 2005.

Some observers were quoted by Reuters as saying that they "expected the deal would take longer to close because of uncertainty about how US regulators might respond to a Chinese company buying a server business during a time of cyber-security tensions between the US and China."

But Lenovo said that its transaction "satisfied regulatory requirements and conditions, including clearance by the Committee on Foreign Investment in the US."

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09/29/14

Permalink 10:04:55 am, by dacare, 1117 words, 57 views   English (US)
Categories: News of China

Consumer attention shifts to smartphones


Joseph WebbHead of digital at TNS Asia-Pacifi c

While television sets still sit in almost every Chinese home, television no longer commands the dominance it once did. Consumer attention, especially during evening prime time, is increasingly being diverted by smartphones and tablets.

Two thirds of Chinese watch television every day, while 33 percent watch online videos daily, either on personal computers, tablets or mobile phones, according to TNS, a research firm under the Kantar division of the WPP Group.

In its most recent Connected Life report, TNS said the ratio of those forsaking television for online entertainment is higher than the global average of 25 percent.

Globally, nearly one third admit to "screen-stacking," a phenomenon whereby they use multiple devices at the same time, for instance, using their mobile whilst watching TV.

Out of the average of 3.9 hours that Chinese Internet users spend online everyday, mobile devices make up 2.2 hours.

Joseph Webb, head of digital at TNS Asia-Pacific, sat down with Shanghai Daily in an exclusive interview to discuss the research findings and what they mean to advertisers.

Q: What's the biggest change you see in this year's Connected Life report?

A: The shift is toward mobile devices, with more and more lower-priced smartphones available on the market. Local handset makers such as Xiaomi and Huawei give a wider group of consumers access to online media.

Last year, we saw the trend appear in the 16-30 age group. This year, it is extending to mainstream mass consumers.

The surprising thing is the change in the media landscape brought about by the shift toward mobile. Smartphones and tablets are driving online video watching. Compared with mature markets like Europe and the US, Chinese consumers watch less TV and more online videos.

Q: Was there anything surprising in your findings?

A: Despite all the talk about China being the biggest e-commerce market in terms of money spent, it is actually very underdeveloped in terms of the proportion of people buying online. Major concerns are still security of payments and product integrity. Once information transparency is resolved and consumers feel more assured, more value can be realized through online retailing.

Q: What about attitudes toward advertising?

A: There is usually a greater level of cynicism toward advertising in mature markets. The more advanced an economy, the more consumers are bored by advertising.

But it's different in China. Here, there isn't such a long-term legacy because the earliest advertising dates back only about 35 years. The advertising industry has enjoyed huge growth since then, and consumers have not yet grown cynical. Maybe the next generation will be, but for now, most consumers are quite open to branding. There is a huge potential for marketers.

Q: Which advertising formats work best with consumers?

A: Brands need to fight harder to cut through the media congestion during the evening prime time, so there are three major trends at the moment. First, a quiet, focused time for the message is essential — for example, before office hours or during commuting periods. The second is finding a brand relevant to those times — working out when your message is most likely to resonate with people. A coffee brand, for example, would find the morning hours most ideal. The third trend is integration of formats, rather than just relying on a single channel.

My advice? Don't advertise on just TV alone. You need to combine different formats to maximize the impact on people during prime times.

Technology and the media landscape in China have changed very quickly into a polarized market. Residents in first-tier and second-tier cities have the latest handsets, but some may still be using a feature phone and a sharing TV with their families.

In a recent study we did for a premium car brand, we found they were seeking to target a female audience without diluting the nature of a very masculine brand. It's hard to achieve that through TV alone. It would be a lot easier to identify what TV shows and websites attract female audiences and then deliver a targeted message.

Q: There is a lot of discussion about dwindling TV viewership. What do you think about the role of TV sponsorship?

A: Castrol recently launched a campaign during the Chinese Idol program, where viewers vote for the candidate to keep in the game. It's a clever move to reach a large viewing audience through sponsorship, while at the same time driving engagement through a Castrol mini-site to give viewers a further impression of how engine oil can protect a vehicle and give it better performance.

Brands are trying to use online channels to forge long-term, lasting relationships with consumers.

Only 64 percent of Chinese viewers devote undivided attention when watching TV while 36 percent are simultaneously engaged in some form of digital activity, slightly lower than the global level of 41 percent.

The growing challenge is that the number of people who exclusively focus on watching TV will get even smaller in the future. The rest will be split over various forms of media because their attention will be more fragmented. Marketers need to be prepared for TV's role to be weakened in the future, although, at the moment, it's still where most advertising expenditure goes.

Q: What about mobile shopping?

A: In global markets where a mobile device is the only access to the Internet, there is very little e-commerce because of trust issues.

In China, the proportion of online sales completed through mobile channels is still less than 20 percent, yet this is one of the most advanced markets for mobile commerce. There are more innovative business models here because software like WeChat offers a convenient payment channel.

This could become a big challenge for a platform like Taobao, which may see commerce increasingly turning to WeChat.

Chinese tech companies love to go it alone and are constantly trying to take other players' market share. For example, Alibaba is adding social features to Taobao and Tmall, while Tencent hopes to catch up with e-commerce through new WeChat functions.

Marketers need to focus on categories where people are dedicating more time to research and reading online comments. It's important to capitalize on that trend because people are more likely to pick up their smartphones and search for price and product information.

In China, categories in the lower price range — such as personal care, cosmetics, baby care and household products — are driving online research as people try to find the best deal for themselves.

Travel and personal care are the top categories where consumers are willing to engage with brands and offer user-generated content.

Mobiles also offer a good channel for brands with normally low levels of engagement because they are much easier to search and interact with.

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09/28/14

Permalink 02:18:15 pm, by dacare, 365 words, 54 views   English (US)
Categories: News of China

'More progress lies ahead' for FTZ

Officials say crude oil futures trading may be the next innovation in zone

Officials of the China (Shanghai) Pilot Free Trade Zone on Friday promised there would be more progress, including the launch of crude oil futures later this year, ahead of the first anniversary of the experimental area.

The Shanghai International Energy Trading Center, a new arm of the Shanghai Futures Exchange, may launch crude oil futures this winter, said Zheng Yang, head of the Shanghai Financial Service Office, at a briefing on Friday.

The trading center was established last November, and it was the largest company registered in the FTZ with registered capital of 5 billion yuan ($815 million). It aims to serve as a platform for international futures trading of oil and other resources.

According to Zheng, the energy trading center is preparing for the launch of crude oil futures.

The Shanghai Stock Exchange also plans to set up a trading platform for international financial assets, said the official.

The FTZ was officially launched on Sept 29, 2013. Its major achievement in the past year has been the streamlining of administrative procedures.

The "negative list" approach, which aims to make it easier for foreign companies to enter the Chinese market, has reduced the number of banned items from 196 to 139.

As of Sept 15 this year, there were 12,266 new companies set up in the FTZ, of which foreign companies accounted for 13.7 percent, and 283 foreign-funded projects were launched in the FTZ.

"The momentum of foreign enterprises is improving, which means the free trade zone has passed the initial evaluation," said Ai Baojun, director of the FTZ, who is also deputy mayor of Shanghai. Ai said logistics costs in the zone have declined by 10 percent.

In late October, the FTZ management committee will release another list that will refine its power and procedures, increase transparency and broaden market access for investors in the FTZ.

When asked about Dai Haibo, the former executive deputy director of the FTZ who was removed in early September, Ai said Dai's removal was a normal change of personnel, and Dai was still carrying out his duties in the government, such as drafting the 13th Five-Year Plan (2016-2020).

Ai did not reveal the successor to Dai.

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Permalink 10:12:38 am, by dacare, 151 words, 59 views   English (US)
Categories: News of China

Time-honored brands eye young consumers

More than 200 Chinese time-honored brands across the country will exhibit their classic and new products in Shanghai at a fair starting from Friday, in the hope of developing popularity among younger consumers like they did in their parents and grandparents.

The four-day exhibition has been held for seven consecutive years in Shanghai, and 237 Chinese companies from Beijing, Tianjin, Chongqing, Shanghai and provinces of Guangdong, Fujian, Heilongjiang, Jiangsu, Zhejiang, Yunnan and Shandong will set up 385 booths in an area of 8,500 square meters this year.

These time-honored brands are eager to show that they not only preserve traditional Chinese culture but also keep up with times. These brands range from food and dining, clothing and accessories, to jewelry, arts, health-care, and modern service.

Some latest products, such as Warrior shoes, Seagull's latest digital camera, will also be shown in the exhibition, and visitors will be allowed to try some of these new products.

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09/26/14

Permalink 10:52:32 am, by dacare, 260 words, 81 views   English (US)
Categories: News of China

Net foreign exchange sales 'no problem'

The State Administration of Foreign Exchange on Thursday sought to allay worries about potential short-term capital flight, saying that the latest foreign exchange figures partly reflect increasing bank deposits in foreign currencies.

The August statistics showed that Chinese banks, for the first time in 13 months, sold more foreign currencies than they bought.

"There hasn't been any substantial change in China's capital inflows or outflows. The gap in the data exists in the form of growing foreign exchange deposits," said Guo Song, director of the capital account management department at the SAFE.

Foreign-currency deposits rose by $15.4 billion last month while loans dropped $3.3 billion, according to Guo.

"It means that companies and individuals are more willing to hold foreign currencies, which is a positive change indicating that the market outlook on the exchange rate has become more reasonable," he said.

In August, Chinese banks sold $147.4 billion in foreign currencies and bought $146.6 billion, yielding an $800 million deficit, according to the SAFE.

The regulator also emphasized taking a "prudent" approach toward the liberalization of the capital account, signaling no imminent or bold reforms in further opening the capital market.

But Guo said the SAFE will pursue the goal of gradually removing restrictions on the yuan's convertibility, creating greater convenience and giving the market more investment freedom.

China has reduced the number of items that require administrative approval from 59 to 20 under the capital account, according to the SAFE.

The agency is studying how to liberalize the rule that imposes a $50,000 ceiling on individuals' annual conversion of yuan to meet the growing demand for foreign currencies.

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09/25/14

Permalink 05:22:22 pm, by dacare, 225 words, 89 views   English (US)
Categories: News of China

Adobe to shut China R&D unit, lay off 300, amid poor quarterly results

Computer software maker Adobe Systems Inc will shut its Chinese R&D arm, it said Wednesday.

The California-based company will maintain its China sales offices in Shanghai, Beijing, Guangzhou, Shenzhen, Hong Kong and Taiwan, Adobe said in a statement on Wednesday, but R&D operations will cease by the end of December.

Layoffs have already begun and will affect around 300 people, a person familiar with the matter told Reuters.

"Adobe's presence in China will be focused on market development activities moving forward, and it will be dissolving and closing its R&D branch there," the company said. "Adobe will maintain its sales presence in Shanghai, Beijing, Guangzhou, Shenzhen, Hong Kong and Taiwan."

On September 17, Adobe reported its worst quarterly revenue for Asia in the last five years. For the three months ended August 29, sales in Asia fell 25 percent to $148.2 million.

Adobe's overall net profit dropped 46 percent year-on-year to $44.7 million in the period.

Media reports Wednesday said that employees of Adobe will get compensation depending on how long they have worked at the company.

The company has been downsizing its business in the region in the past few years.

In 2012, the company closed its unit in Taiwan and said that its business in Taiwan would be moved to its Hong Kong branch.

Adobe, founded in 1982, makes popular software such as Photoshop and Dreamweaver.

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