By Associated Press | Updated: 17 November 2020
Chinese tech giant Huawei is selling its budget-price Honor smartphone brand in an effort to rescue the struggling business from damaging US sanctions imposed on its parent company.
The move announced Tuesday is aimed at reviving Honor by separating it from Huawei’s network equipment and other businesses, which Washington says are a security threat, an accusation Huawei denies. They are under sanctions that block access to most US processor chips and other technology.
Huawei’s announcement gave no financial details but said the company will have no ownership stake once the sale is completed. Huawei will retain its flagship Huawei smartphone brand.
The buyer is a company formed by a technology enterprise owned by the government of the southern city of Shenzhen, where Huawei is headquartered, with a group of Honor retailers. Earlier news reports on rumours of a possible sale put the price as high as CNY 100 billion (roughly Rs. 1,13,300 crores).
“The move has been made by Honor’s industry chain to ensure its own survival,” said a Huawei statement.
Huawei, China’s first global tech brand, is at the centre of US-Chinese tension over technology, security and spying.
American officials say Huawei might facilitate Chinese spying, which the company denies. They also see Chinese government-supported technology development as a threat to US industrial dominance.
US security complaints about Huawei focus on its business making switching equipment for phone and Internet companies and its leading role in next-generation telecom technology. The Trump administration is lobbying European and other allies to exclude Huawei and other Chinese suppliers as they upgrade networks.
Meanwhile, Huawei’s chief financial officer, Meng Wanzhou, the daughter of company founder Ren Zhengfei, is being held in Canada and is fighting extradition to the United States to face charges related to possible violations of trade sanctions on Iran.
Sanctions imposed last year block Huawei’s access to most US processor chips and other technology. Those were tightened this year when the White House barred manufacturers worldwide from using US technology to produce chips for Huawei, including those designed by its own engineers.
Tuesday’s announcements gave no indication how Honor’s new owners planned to regain access to US chips and other technology including Google’s popular music, maps and other services. Other Chinese smartphone brands such as Xiaomi, Oppo and Vivo operate without such restrictions.
Honor, founded in 2013, is one of the world’s biggest-selling smartphone brands. Huawei says it ships 70 million handsets a year.
Total shipments of Huawei and Honor handsets fell 5 percent from a year earlier in the quarter ending in June to 55.8 million, according to Canalys. Sales in China rose 8 percent but shipments abroad fell 27 percent.
Huawei reported earlier sales for the first nine months of 2020 rose 9.9 percent to CNY 671.3 billion (roughly Rs. 7,60,700 crores). That was down from 13.1 percent growth in the first half, but the company said it still was profitable.
Huawei’s smartphone sales outside China have suffered because the company is barred from preinstalling Google services, which many customers expect. Huawei is allowed to use Google’s Android operating system because it is open source and involves no commercial transaction with the American company.
Huawei says it has removed US components from its core products but the president of its consumer unit, Richard Yu, warned in August the company was running out of chips for smartphones.
Samsung Galaxy Note Smartphones Said to Be Discontinued in 2021
By Reuters | Updated: 1 December 2020
Samsung may discontinue its premium Galaxy Note phone next year, sources with knowledge of the matter said, a move that would reflect the sharp drop in demand for high-end smartphones due to the coronavirus pandemic.
The Galaxy Note, known for its large screen and a stylus for note-taking, is one of two Samsung premium phone series, the other being the more compact Galaxy S which draws in consumers with its state-of-the-art parts.
At present, the South Korean tech giant does not have plans to develop a new version of the Galaxy Note for 2021, three sources said, declining to be identified as the plans were not public.
Instead, the Galaxy S series’ top model, the S21, will have a stylus and the next version of Samsung’s foldable phone will be compatible with a stylus, which will be sold separately, one of the sources said.
A second source said company development efforts that normally would have been directed to the Note would now be channelled into its foldable phone range.
Samsung declined to comment.
Tom Kang, an analyst at research firm Counterpoint, said sales of Samsung’s Note series are expected to fall by a fifth to 8 million this year while sales of the S series are likely to drop by 5 million to less than 30 million.
“Premium demand has decreased this year and many people are not looking for new products,” he said.
The Galaxy Note 20 was launched in the United States this year with a $999 (roughly Rs. 73,400) price tag, on par with the Galaxy S20 while the iPhone 12 starts at $799 (roughly Rs. 58,700).
Samsung first launched the Note in 2011, breaking new ground in the market for larger screen models and helping it overtake Apple to become the world’s largest smartphone maker for the first time that year.
© Thomson Reuters 2020
Apple Fined 10 Million Euros in Italy for ‘Misleading’ iPhone 12 Claims
By Agence France-Presse | Updated: 30 November 2020
Italy’s competition authority said Monday it had fined Apple EUR 10 million (roughly Rs. 90 crores) for misleading claims about the water resistant properties of various iPhone models.
It said the US tech giant “did not make it clear that this feature exists under certain specific conditions”, notably in laboratory tests with static and pure water, “and not under normal conditions of use”.
It cited promotional claims relating to the iPhone 8, iPhone 8 Plus, iPhone XR, iPhone XS, iPhone XS Max, iPhone 11, iPhone 11pro and iPhone 11 pro Max models.
The authority also rapped Apple for a disclaimer that the warranty for the smartphones did not cover damage caused by liquids, saying it “was deemed to mislead consumers”.
In addition, it said Apple’s refusal to provide warranty service when the iPhone models concerned were damaged by liquids amounted to “an aggressive commercial practice”.
“For these reasons, the authority has decided to impose penalties totalling EUR10 million (roughly Rs. 90 crores) on Apple Distribution International and on Apple Italia,” it said in a statement.
Huawei CEO Ren Zhengfei Urges Honor Sub-Brand to Become Competitor After Split
By Reuters | Updated: 27 November 2020
Huawei founder Ren Zhengfei called on employees of its departing Honor subbrand to strive to surpass its parent in a farewell speech as the tech giant sells the budget brand to keep its sanction-hobbled supply chains alive.
Huawei said earlier this month it would sell Honor to a new entity called Shenzhen Zhixin New Information Technology, formed of its agents and dealers, so it could resume sourcing components currently restricted by US sanctions.
The US government says Huawei is a national security threat, a claim the company denies.
“Wave after wave of severe US sanctions against Huawei has led us to finally understand, certain American politicians want to kill us, not just correct us,” Ren said, according to a speech posted on a Huawei employee forum on Thursday.
While Huawei could overcome the difficulties, “millions” of employees at Honor’s agents and distributors around the world would lose their jobs as sales channels dried up, Ren’s speech said.
“We don’t have to drag innocent people into the water just because we suffer,” he said.
Honor-brand smartphones made up 26 percent of the 51.7 million handsets Huawei shipped in July-September, according to consultancy Canalys. The company’s products also include laptops, tablet computers, smart TVs and electronic accessories.
Huawei’s rivals have been ramping up production orders, anticipating they can gobble up market share while the giant is unable to produce new handsets, several industry sources recently told Reuters.
If Honor could resume production, it could retain market share, said Flora Tang, an industry analyst with Counterpoint Research.
Ren called on Honor to become Huawei’s biggest competitor after the “divorce,” and said toppling Huawei should “become your slogan for motivation”.
“We are your competitors in the future,” he said.
© Thomson Reuters 2020
iPhone 12, Xiaomi Devices from China Hit by India Import Hurdles: Sources
By Reuters | Updated: 25 November 2020
India’s tight control of quality clearances for electronic goods from China slowed the import of Apple’s new iPhone model last month and held up other products made by companies like Xiaomi, according to two industry sources.
Applications to the quality control agency, the Bureau of Indian Standards (BIS), typically used to be processed within 15 days, but some are now taking up to two months or longer.
BIS started delaying approvals in August for China-made imports of devices like smartphones, smartwatches and laptops, part of the fallout from deteriorating ties with China after a border clash in June that left 20 Indian soldiers dead.
Since the clash India has tightened rules for investments from China and banned hundreds of Chinese mobile apps, including from tech giants Tencent, Alibaba and ByteDance. It banned 43 more apps on Tuesday.
When Apple’s new iPhone 12 was caught in the delays, Apple India executives called on BIS to speed its approval up, giving assurances that the company would continue to expand its assembly operations in India, the two sources said.
It was not clear how long the iPhone 12 application was delayed, and Apple did not respond to a request for comment.
The company has assembly operations in India, but newer models and the iPhone 12 are imported from China, where contract manufacturers make the bulk of Apple’s devices.
As of Wednesday, 1,080 applications to BIS for laptops, tablets and other devices were pending, with 669 of those waiting more than 20 days, according to the agency’s website.
These included applications for devices from China-based factories of Wistron and Compal Electronics, and from Hangzhou Hikvision, the data showed.
Some of the applications for approval have been pending since September.
Calls for boycotts
Indian traders and Hindu nationalist groups have for months called for boycotting imported products from China because of the border clash, while Prime Minister Narendra Modi continues to promote self-reliance and local production.
“While the BIS is delaying approvals for products like smartwatches, the Ministry of Electronics and Information Technology is pushing companies to make these devices in India,” said one of the sources.
Under BIS’s registration scheme, certain electronic goods, whether imported or locally made, need to meet certain standards. After companies get their products tested in a certified laboratory, BIS approves the applications.
Wistron and Compal did not respond to requests for comment. Hikvision declined to comment.
BIS Director General Pramod Kumar Tiwari and India’s tech ministry did not respond to requests for comment.
The clearance delays are the latest headache for technology companies whose supply chains were hit by the COVID-19 curbs, pushing some smartphone makers to resort to imports of even models made in India. The delays also come during India’s festive season when customers make big ticket purchases of everything from mobile phones to gold and cars.
The BIS delays have also hit smartwatch imports for companies including Xiaomi and Oppo, the two sources said.
Xiaomi and Oppo did not respond to requests for comment.
In July, India’s trade ministry also restricted inbound shipments of TVs by requiring importers to get a special licence, a move that one of the sources said continues to hurt companies such as Xiaomi and Samsung.
Xiaomi was denied the special licence to import roughly 30,000 units of TVs, while Samsung has faced similar import hurdles, the source said.
Samsung did not respond to a request for comment.
© Thomson Reuters 2020
Xiaomi Rides Smartphone Shipment Surge to Post 19-Percent Jump in Profit
By Reuters | Updated: 24 November 2020
Xiaomi reported a 19 percent jump in third quarter net profit on Tuesday, beating estimates, as the Chinese smartphone maker’s smartphone shipments over the quarter surged by 45.3 percent on a year earlier.
Smartphone revenue grew to CNY 47.6 billion (roughly Rs. 53,500 crores), an increase of 47.5 percent in the same period, it said in a statement. Overall quarterly revenue rose to CNY 72.1 billion (roughly Rs. 81,100 crores) up from CNY 53.7 billion (roughly Rs. 60,400 crores).
Analysts had on average forecasted that Xiaomi would report quarterly net profit of around CNY 3.28 billion (roughly Rs. 3,700 crores), according to Refinitiv data.
Xiaomi has grabbed market share from in China and Europe as its rival Huawei has struggled with US sanctions that have disrupted its supply chain.
The company anticipates it will continue to gain market share after the last round of US sanctions against the latter disrupted its supply chains in August, several industry sources told Reuters.
Xiaomi placed orders for up to 100 million phones between the fourth quarter of 2020 and first quarter of 2021, up 50 percent on projections before the August restrictions, consultancy Isaiah Research said.
The company rose to become the third-biggest seller of handsets in the third quarter, shipping 47.1 million units with 45 percent growth, according to consultancy Canalys. Samsung is the largest, followed by Huawei.
Xiaomi is also attempting to court Huawei’s distributors in Southeast Asia and Europe in the hopes of gaining exclusive deals, and is actively targeting Huawei’s high-end market share in China, said a source at Xiaomi familiar with the matter.
© Thomson Reuters 2020
Apple to Pay $113 Million to Over 30 US States to Settle iPhone ‘Batterygate’
By Agence France-Presse | Updated: 19 November 2020
Apple has agreed to pay $113 million (roughly Rs. 840 crores) to settle litigation with more than 30 US states over its slowdown in performance of older iPhones to manage battery power.
The latest “batterygate” settlement will divide the settlement among California and 33 other states, according to a statement by state Attorney General Xavier Becerra.
The settlement resolves complaints that the tech giant made misrepresentations about iPhone batteries and software updates that throttled processing performance to manage insufficient battery power, according to the state official.
“Apple withheld information about their batteries that slowed down iPhone performance, all while passing it off as an update,” said Becerra.
“This type of behaviour hurts the pockets of consumers and limits their ability to make informed purchases. Today’s settlement ensures consumers will have access to the information they need to make a well-informed decision when purchasing and using Apple products.”
The settlement resolves complaints about Apple’s iPhone 6 and 7 generation phones which according to the states’ complaint were susceptible to performance loss.
Apple had no immediate comment on the matter.
In the court documents, the iPhone maker said it agreed to the payout “solely for the purposes of settlement,” without any admission of wrongdoing.
Earlier this year Apple agreed to pay up to $500 million (roughly Rs. 3,700 crores) to settle a class-action lawsuit over the same issue.
In December 2017, Apple admitted that iOS software was tweaked to slow performance of older iPhone models whose battery life was deteriorating to prevent handsets from spontaneously shutting down.
Critics accused Apple of surreptitiously forcing users to buy phones sooner than necessary, and the outcry forced Apple to upgrade its software and offer steep discounts on battery replacements.
Apple also settled a case with France’s consumer watchdog to pay EUR 25 million (roughly Rs. 200 crores) in a related case.
French prosecutors opened an inquiry in January 2018 at the request of the Halt Planned Obsolescence (HOP) association.
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