Hello, this is Mercedes in Singapore. Apple appears to have found itself yet again in an uncomfortable — and familiar — position between the US and China. Today’s Big Story details how a livestream promoting the much anticipated latest iPhone was curiously absent on Chinese social media, further highlighting the complications Apple faces as a US company in the world’s biggest smartphone market.
In other news, Ant Group’s mega-IPO is under scrutiny, as is KKR’s plan to reposition itself as a tech investor in Asia (Mercedes’ top 10). We have strong stories on India this week, from a magazine cover on Mukesh Ambani’s digital ambitions (Spotlight), to a piece on how India is convincing manufacturers to expand in the country (top 10) and finally a scoop hot off the press on Tata and Big Basket (Art of the deal). Don’t miss an interesting take on China’s new digital currency from ASPI (When sages speak) and last but not least, check out how seafood companies are moving into the chip sector for China’s “Great Semiconductor Leap Forward” (Smart data). Take care until next week.
The Big Story
Apple’s launch of 5G phones hit an embarrassing snag in China. Chinese social media sites cancelled the livestream coverage of the much-anticipated iPhone 12 launch shortly before Tim Cook, Apple’s chief executive, went on screen.
None of the five big Chinese video platforms, including Tencent Video and iQiyi, that were due to carry the livestream gave a reason for the cancellation. “The live streaming is blocked, we can only go to Apple’s official site,” wrote one user on Weibo, China’s Twitter-like platform.
Key implications: The cancellations highlight the geopolitical headwinds and competition that Apple faces in China, the world’s largest smartphone market. The Trump administration’s efforts to ban popular Chinese-owned apps like WeChat and TikTok from the company’s app store have stoked Sino-American tensions.
Apple has lagged far behind several Chinese competitors in bringing a 5G iPhone to market. Oppo, China’s second largest smartphone maker, announced a deal this week with Deutsche Telekom to sell 5G smartphones — the Reno 4 series — in Germany, the Netherlands and Poland.
Oppo’s sales in western Europe have tripled this year, said Alen Wu, Oppo’s vice-president and president of global sales, in an interview.
Upshot: The popularity of Apple’s new 5G smartphone is likely to depend on the consumer experience. But it has not got off to an auspicious start in China.
Mercedes’ top 10
China’s Ant Group, shaping up to launch the world’s biggest IPO, is being scrutinised for selling exposure to the share sale on its own app.
Meanwhile, Huawei is still heavily reliant on US parts for its 5G telecom base stations, according to a Nikkei Asia teardown.
Scoop: Some strange policy from the US on Hong Kong, in which access to basic government sites is blocked in the Chinese territory.
Japanese companies that have tried to pull the plug on their China operations have discovered it is a complicated — and risky — process.
SoftBank reportedly plans to launch a blank-cheque company — also called a Spac — to gain external funding. Lex thinks the Japanese group is oblivious to investor needs.
India is pulling out all of the stops to get mobile phone and electric parts manufacturers to expand their production away from China.
Can KKR successfully diversify in Asia from doing big private equity transactions to early stage tech investing?
Shenzhen is shaping up as China’s digital renminbi hub, if last week’s handouts to 50,000 randomly selected residents are anything to go by.
Don’t miss this excellent read on how a familiar force of disruption — digitisation — threatens Japan’s ludicrously expensive funeral industry.
When sages speak
There are some really insightful comments in this webinar hosted by the Chicago Council on Global Affairs and featuring Evan Feigenbaum at the Carnegie Endowment for International Peace, Lindsey Ford at the Brookings Institution and James Steinberg, a professor at Syracuse University. All three held senior positions in US administrations.
Rui Ma and Ying Lu at Tech Buzz China give a fascinating talk here about little-known but fast-growing Chinese companies such as Youzan, best described as a Chinese version of Shopify (which allows anyone to start an online shop). Headed by Bai Ya, a colourful character in China’s tech scene, Youzan and others such as Weimob are doing a roaring trade.
This is a revealing survey by CSIS, a Washington-based think-tank, on the attitudes of leading American commentators on China. Some 70 per cent think that the US should ban Huawei and other Chinese firms from the US market.
Finally, here is an interesting take on China’s new central bank digital currency from a team of researchers at ASPI.
Best of comment
In 2014, when SoftBank overtook NTT DoCoMo as Japan’s biggest carrier in terms of revenue and profit, its founder Masayoshi Son was blunt about what made his group different from its rival, writes Kana Inagaki of the Financial Times in Tokyo.
“The biggest difference is we have the hungry spirits to compete and grow as part of our corporate culture,” said Mr Son, noting the risks his group was willing to take to reach the number one position. By then, he had already set his ambitions outside Japan with a $21.6bn acquisition of US carrier Sprint a year earlier and later a $32bn deal to buy UK chip designer Arm in 2016.
Six years on, Nippon Telegraph & Telephone has launched a bid that is bigger than any deal SoftBank has ever done. But instead of spending money overseas like its rival, the Japanese telecoms conglomerate will invest $40bn to buy the 34 per cent stake it does not own in mobile phone operator NTT DoCoMo. So why spend so much money to take over a subsidiary it listed 28 years ago?
Beyond the sheer scale of the bid, the deal looks mostly defensive and has garnered little attention outside of Japan. But the consequences of NTT’s move could be significant. If it succeeds in strengthening the group, it will help Japan Inc find its way back into the global race to deploy 5G networks and future mobile technologies. If it fails, it will deliver a further blow to the country’s rapidly fading presence in the global market for telecommunications.
Mukesh Ambani would not be particularly recognisable outside of India. Heavy set, with deep bags under his eyes and a penchant for white short-sleeved shirts, the camera-shy 63-year-old is a sober contrast to hoodie-wearing, device-clutching American tech bosses, write Benjamin Parkin and Anjli Raval in this in-depth FT Magazine profile.
But that appearance belies his importance in a country of 1.4bn people, and the power that his $80bn fortune brings. Reliance Industries was a lucrative, if unglamorous, petrochemicals and oil refining group when Ambani took control in 2005, three years after his father’s death.
But over the past decade, he has embarked upon a project that has made him one of the most talked about people in Silicon Valley. Jio, the mobile operator he launched in 2016, has already muscled aside competitors to become India’s largest. Ambani hopes it will become the country’s answer to China’s Alibaba, a homegrown tech giant in one of the world’s fastest-growing internet markets.
Art of the deal
Tata Group is in talks to tie up with Indian online groceries unicorn Big Basket, valued at $1.3bn, in a bid to catch up with Amazon and Mukesh Ambani’s Reliance Retail.
Chinese online lender Lufax is pushing ahead with its US IPO even as the Trump administration wants to delist mainland companies.
Dida Chuxing, not to be confused with Uber-backed ride-hailing company Didi Chuxing, is set to be Asia’s first ride-sharing IPO.
Huya has agreed to buy DouYu International in a deal that will create a Chinese game-streaming giant with a market value of more than $11bn — and Tencent will hold nearly 70 per cent of the voting shares.
Alibaba-backed Thai logistics company Flash Express has raised $200m from the oil and retail businesses of Thai conglomerate PTT. Durbell and Krungsri Finnovate, two other top local conglomerates, also participated.
China’s financial support of its domestic semiconductor sector in response to US efforts to block its development as a technology power has spawned a new description in state media: the “Great Semiconductor Leap Forward”.
More than 13,000 Chinese enterprises registered as semiconductor companies in the first nine months of this year, according to data from Qichacha, a Chinese companies information provider. That is even before Beijing is expected to sharply increase its backing of the chip industry as part of its 14th Five-Year Plan, to be announced at the end of October.
Chinese companies with no known experience of semiconductors are moving into the sector. Take Shanghai Xinpeng Industry Co, an auto parts maker which registered as a semiconductor producer in July. Dalian Morningstar Network Technology Co, a seafood maker, turned online gaming company, is also getting in on the action.