The total value of all bitcoins in circulation hit a record high above $14 billion this week, as the web-based digital currency to its highest levels in three years after more than doubling in price this year.
The price of one bitcoin reached $875 on the Europe-based Bitstamp exchange, its strongest level since January 2014, putting the cryptocurrency on track for its best daily performance in six months.
That compared with levels around $435 at the start of the year, with many experts linking bitcoin’s rise with the steady depreciation of the Chinese yuan, which has slid almost 7 percent this year.
Bitcoin is a web-based “cryptocurrency” that can move money across the globe quickly and anonymously with no need for a central authority. That makes it attractive to those wanting to get around capital controls, such as China’s.
The digital currency is still some way off the peaks it scaled in late 2013, when it traded as high as $1,163 on the Bitstamp exchange.
But because more bitcoins continue to be added to the system, currently at a rate of 12.5 every 10 minutes, its total value – or “market cap” – on Thursday surpassed the 2013 peak of around $14.01 billion. That puts its total value at around the same as that of an average FTSE 100 company.
Charles Hayter, founder of data analysis website Cryptocompare, said bitcoin had been helped higher by demonetization in India, and by global political uncertainty.
“If that trend continues, bitcoin is a good thematic play on the fracturing of our global norms as a flight to safety,” he said.
The cutting-edge device will retail in China starting at 3499 yuan (US$574), which is far more than the cost of low-end handsets that have flooded store shelves, and turned China into the world’s largest smartphone market.
For years, Chinese handset vendors have been competing in the local market by offering cheap products that most people can afford. Prices have continually gone down, as rival companies have sought to undercut one another with Android phones at 599 yuan (US$96) or even lower.
But with the market already saturated with cheap devices, some of these vendors are starting to focus on pricier phones, and hoping that Chinese consumers will buy them.
ZTE rolled out the Z9 through its Nubia brand, which has so far not been used on low-end handsets. Nubia phones were developed to create a premium product line, said the brand’s senior vice president Felix Fu in an interview. He’s betting that the market wants more choice in the high-end segment.
“Consumers wanting to upgrade to something better is a big trend in China,” he said. “More consumers are willing to spend more, if it will buy them a product with better value.”
Chinese phones are sometimes stereotyped as being inexpensive, but shoddy devices. The Z9, however, is different. It uses a rarely seen bezel-less screen, fitted in a sleek metal frame.
ZTE isn’t alone in trying to offer high-end phones. Fast-rising Chinese handset maker Xiaomi is perhaps best known for offering low-cost Android Phones. This week, it will start selling its priciest handset, the Mi Note Pro. which will retail at 2999 yuan (US$483), and comes with a 2560 by 1440 pixel screen and 4GB of RAM.
Lenovo, on the other hand, reintroduced the Motorola brand in China as a way to target consumers with larger wallets. The Moto X, for example, starts at 2999 yuan(US$483) and the Moto X Pro at 4299 yuan ($692).
Chinese handset makers don’t want to settle at making low-end products and instead strive to become quality brands, said Wang Jingwen, an analyst with research firm Canalys.
In another dose of bad news for Samsung Electronics, the Korean tech giant has lost its ranking as China’s top smartphone vendor, after holding onto the position for two straight years, according to research firm Canalys.
In this year’s second quarter, Chinese company Xiaomi overtook Samsung to become the country’s largest smartphone maker with a 14 percent market share. Samsung held on to the second spot, with a 12 percent share, slightly ahead of third place Lenovo, outshipping it by 200,000 units.
The Korean electronics giant had been China’s leading smartphone maker since 2012’s first quarter, said Wang Jingwen, an analyst with Canalys. At the time, the company’s market share was 22 percent.
In China, Samsung sells a large range of handsets, from high end to low, and benefits from a strong brand and a vast reseller network. But its Chinese rivals are increasingly putting pressure on the company, especially when it comes to selling lower-end phones, Wang said.
“In the mid-to-low end segment, Samsung devices have not represented great value for money in China,” she said. The country’s largest mobile carrier, China Mobile, is also partnering more with domestic handset makers to launch phones built for its new 4G network, Wang added.
Xiaomi, on the other hand, has been growing fast, largely by selling feature-packed smartphones at just above cost price. This marks the first time the Chinese company has taken the top spot in China, after only starting to sell phones three years ago.
Xiaomi’s low-end series of phones, known as Redmi, are driving the company’s shipments in China, which reached almost 15 million in the second quarter, according to Canalys. The Redmi phones can start as low as 699 yuan (US$113) when bought without carrier subsidies.
Xiaomi’s aggressive pricing is leading the company’s success, Wang said. The company has already sold 26.1 million phones in this year’s first half, with the goal of selling a total of 60 million by the end of this year. Although not a big name outside of China, Xiaomi is expanding to ten foreign markets this year.
ZTE and other Chinese smartphone vendors are increasingly tapping the high-end sector as competition has pushed margins so narrow that their mainstay low-priced handsets in China are barely profitable.
The world’s ninth-biggest smartphone vendor launched its Nubia brand in 2012, while peer Huawei Technologies Ltd is gunning for high-end recognition with its Ascend series and Lenovo Group Ltd is touting its Vibe and K lines.
“We will make more and more premium smartphones,” ZTE’s executive vice-president Zeng Xuezong told Reuters in a recent interview.
Shenzhen-based ZTE, which also makes telecommunications network equipment, aims to increase its global smartphone shipments from 40 million last year to 60 million this year, 80 million next year and 100 million in 2016.
“After our efforts in the past two years, I believe our brand awareness and approval rating from customers could rival those of Apple and Samsung in China,” Zeng said.
The introduction of fourth-generation (4G) networks in the world’s biggest mobile market is likely to stimulate demand for compatible handsets, so at least 60 percent of next year’s smartphone shipment target will be 4G-ready, Zeng said. That would compare with 40 percent of ZTE’s 2014 target.
ZTE’s feature-rich Nubia Z5, Huawei’s Ascend P7 and Lenovo’s Vibe Z are billed as high-end smartphones, but are priced around 2,000 yuan less than premium handsets such as Apple’s iPhone 5S and Samsung’s Galaxy S5.
More up-market handsets could help ZTE and its peers shed perceptions of inferior quality associated with Chinese brands – perceptions exacerbated by security concerns raised by U.S. government officials about Chinese-made communications equipment.
“There is indeed a gap between the brand awareness of Chinese companies and those top global brands, and this is what our team is trying to build for consumers,” Zeng said.
ZTE aims to raise its U.S. market share to 10 percent by 2017 from 6 percent last year by spending more on marketing.
China’s Huawei Technologies Co Ltd has targeted 2018 revenue almost double the record made last year when the company amassed an impressive 34 percent profit growth and became the world’s third-biggest smartphone manufacturer.
Huawei has been flooding emerging markets with low-priced smartphones and tapping advanced economies with high-end offerings to make up for slowing growth in its primary business of building mobile telephone networks.
Smartphones last year contributed the most to revenue growth in yuan terms and are likely to feature prominently in reaching a revenue target which translates as roughly 10 percent annual growth.
To reach that target, the company will have to improve on 2013 when revenue hit a record yet grew at a pace slower than Huawei’s 10 percent goal primarily because overseas companies spent less on networks.
Huawei also missed its smartphone sales target as local peers Lenovo Group and ZTE Corp pursued similar strategies to close the gap with leaders Apple Inc and Samsung Electronics Co.
“In 2014, we are aiming our sales efforts at improving our branding image,” Eric Xu, Huawei’s rotating and current chief executive, said on Monday.
“At the same time, we are going to build our (smartphone) product portfolio in the mid-range and high level,” Xu said after the unlisted company released audited earnings results.
In 2013, revenue hit a record 239 billion yuan ($38.47 billion), helping operating profit land within Huawei’s guidance range, and pushing net profit up 34.4 percent to 21 billion yuan – its quickest profit growth in four years.
Revenue grew 18 percent in Huawei’s consumer division, which includes smartphone manufacturing, and the company expects a similar rate of growth this year.
In the enterprise division, which builds private networks for companies and organizations, revenue grew 32 percent thanks to companies investing heavily in cloud and mobile computing.
Revenue in the carrier network business – which accounts for about 70 percent of overall income – grew just 4 percent. Huawei aims to double that to 8 percent this year as carriers increase investment in 4G, particularly in China.
Overall, Huawei targets revenue of $70 billion by 2018, or annual growth of about 10 percent, executives said at the press conference.
Growth was 8.6 percent last year rather than the targeted 10 percent, and smartphone shipments reached 52 million handsets instead of the 60 million handset goal.
Huawei smartphone sales last year barely made a dent in the U.S., the second-biggest market, where lawmakers have flagged Chinese telecommunications equipment as potential security risks.
China’s e-commerce market is expected to blow past that of the United States this year to become the world’s largest by total customer spending, management consultancy firm Bain & Company says, and could account for half of all Chinese retail spending within a decade.
The change in shopping habits comes as almost half of the country’s 1.3 billion population now have direct access to the Internet, and of that number nearly 80 percent own smart phones or tablets.
China’s e-commerce market has grown at an average rate of 71 percent from 2009 to 2012, versus 13 percent in America, and its total size is expected to reach 3.3 trillion yuan ($539.07 billion) by 2015, Bain & Company said in a report released on Wednesday.
Total spending by Chinese consumers on online shopping reached $212.4 billion in 2012, compared to $228.7 billion in the U.S., the report said.
Chinese companies with retail outlets have had to realign their sales strategies to compete with online rivals who threaten to undercut them in an increasingly competitive market long dominated by e-commerce company Alibaba Group, and others like 360Buy Jingdong.
“It’s a massive change. It just means you need to be on the web, whether you like it or not,” said Serge Hoffmann, a partner at Bain and co-author of the report.
“Whether you’re an online player or an offline player, you need to have a meaningful, credible presence on the web.”
While still a small portion of total revenues, the growth of online sales is far outpacing offline sales growth.
Haier Electronics Group, which operates an online stall on Alibaba’s business-to-consumer site Tmall.com, saw its e-commerce revenue jump almost 500 percent to 633 million yuan, or 2 percent of its total revenue, in the first half of 2013, from 106 million yuan in the same period last year. Its total revenue grew 10.2 percent.
Suning Commerce Group saw its e-commerce business rise to 10.6 billion yuan in the first half of 2013, an increase of 101 percent on the same period last year.
Soon retail companies may have to take a leap of faith, shutting their bricks and mortar outlets to reduce overhead costs and hope that customers will turn to their online stores, said Nicholas Studholme-Wilson, a senior analyst at Sun Hung Kai Financial in Hong Kong.
Alibaba, whose Taobao customer-to-customer website is the world’s 10th most visited according to web monitor Alexa, predicts e-commerce will account for half of all Chinese retail spending in 10 years, from 6 percent now.
“Proliferation of smart devices mean everybody is connected at all times, that’s one of the key drivers for this,” said Studholme-Wilson.
“Another problem you’ve got in China is that retail is so damn expensive. Land costs and labor costs are all really hurting margins. Whereas it’s actually very easy to set up a shop on Tmall and your costs are massively reduced,” he said.
Logistics, however, pose a major obstacle to e-commerce development, and Alibaba is now working with Chinese logistics firms to improve nationwide infrastructure and delivery networks, said Shih.
Baidu will buy a 57.4 percent stake in 91 Wireless, one of China’s earliest appstores, from NetDragon Websoft Inc for $1.09 billion, and the remainder from other shareholders, both companies said on Tuesday.
“It’s good for Baidu because if you look at mobile, currently apps are more popular than mobile sites because Internet download speeds are slow. So with the acquisition of this appstore, Baidu can work more closely with the apps developer and be able to enhance further their search capabilities,” said Elinor Leung, an analyst with CLSA in Hong Kong.
China’s mobile Internet market is expected to double to about 300 billion yuan ($48 billion) in 2014 from 150 billion yuan in 2012, with the number of active mobile Internet users rising to 749 million from 521 million during the same period, according to research firm Analysys International.
NetDragon’s shares lost as much as a fifth of their value on Tuesday and were down 18 percent at HK$19.74 at 0305 GMT (11.05 p.m ET)
NetDragon also said in a statement that it would scrap the planned spinoff and listing of 91 Wireless on Hong Kong’s secondary Growth Enterprise Market if the acquisition is finalized.
According to the company’s Chinese e-store, the Surface Pro will go on sale April 2 at 9 p.m. local time.
The Chinese debut will be the tablet’s first market expansion since its U.S. and Canadian launch on Feb. 9. Microsoft first announced the Surface Pro’s availability on the Chinese-language Weibo social networking service.
LiveSino.net reported earlier in the day that Microsoft was introducing the tablet in China on Tuesday.
It’s been no secret that China was on the short list for the Surface Pro. Three weeks ago, Microsoft said the Windows 8 Pro-powered device would go on sale in several more markets in the second quarter, including Australia, China, France, Germany, Hong Kong, New Zealand and the U.K.
The Microsoft Store does not show prices for the Surface Pro, but another Chinese website,WPDang, said the 64GB model would cost 6,588 yuan, equivalent to $1,061. The higher-priced 128GB Surface Pro, meanwhile, will be priced at 7,388 yuan ($1,190).
U.S. prices for the Surface Pro are $899 (64GB) and $999 (128GB).
Microsoft has to hope that the Surface Pro does better in China than the lower-priced Surface RT predecessor: Research firm IDC pegged shipments — which are different, usually higher, than sales — of the latter in China at just 30,000 units during the last two months of 2012’s fourth quarter. Worldwide, Microsoft shipped approximately 900,000 Surface RTs in the same period, IDC said.
Microsoft’s Chinese move hints that stock shortages have been solved. While the Surface Pro is now ready to ship from Microsoft’s U.S. e-store, last month the 128GB configuration’s availability was spotty for several weeks following the tablet’s launch.
Baidu, which operates China’s most popular search engine, has taken the wraps off of its newest smartphone, featuring the company’s own mobile platform and priced to target the country’s low-end handset segment.
The Changhong H5018 will be priced at about $158 without a contract, the company said Tuesday. The device marks the second smartphone the company has released, the last one being a handset developed in cooperation with U.S. PC maker Dell that was announced in December.
Baidu’s last smartphone, the Dell Streak Pro D43, was priced three times higher than the H5018 at 2,999 yuan, and was marketed toward business users and young trendsetters.
This time, Baidu has partnered with Chinese handset vendor Changhong to create a new handset, which was manufactured by Foxconn. The phone is built with a 3.5-inch (8.89-centimeter) touchscreen and has a 3-megapixel camera along with a 1,400mAh battery.
The less than 1,000 yuan price-tag puts the smartphone in a market segment that analysts believe will have the fastest growth in China. Currently, only about 15% of China’s 1 billion mobile phone subscribers are using 3G services, according to government statistics. But this is expected to change as consumers move toward more affordable smartphones.
The Changhong H5018 also incorporates the Chinese search giant’s latest mobile handset platform, Baidu Cloud, which has supplanted the company’s previous mobile platform “Baidu Yi,” according to company spokesman Kaiser Kuo.
Chinese companies including Baidu and Alibaba are still in the early stages of mobile product development and are experimenting with various business models, said Nicole Peng, an analyst with research firm Canalys. This comes as U.S.-based Google has partially withdrawn from China, making its Google Play Store unavailable for the country.
The problem appears to affect the Iphone 4S regardless of mobile carrier, internal storage size or whether it is black or white coloured.
Most users said that the noise is relatively faint, but can become increasingly annoying on long phone calls. Regardless of the severity of the problem, it appears to be quite widespread and has caused significant upset amongst customers, to the point that some have switched to rival devices.
Some carriers have suggested a phone and network reset, as well as swapping SIM cards, but these tactics have failed to fix the problem. Users have speculated that it is likely a hardware issue, such as a problem with radio interference or possibly some defective Qualcomm chips. If this is the case it will make solving the problems significantly harder, as it likely cannot be fixed with a simple software update.
Apple has so far failed to respond to the complaints, but if it does we imagine it will blame everyone but itself for the problem and possibly tell users to hold their phones in a different way, the original solution suggested for an Iphone 4 issue that caused frequent dropped calls. That incident went down in history as ‘antennagate’, suggesting how damaging it was to the company’s reputation.
This is not the first problem to affect the Iphone 4S. Users have been complaining about extremely poor battery life on the device, which Apple claims it will fix with a software update. Despite its best efforts Apple has also failed to fix a daylight savings time change bug that has plagued its Iphones for some time. Unlike these software bugs, this latest problem could escalate until it becomes known as ‘staticgate’, a possibility that Apple will be keen to avoid.
China’s leading daily-deals website Lashou Group has hopes of raising up to $100 million in an initial public offering on the Nasdaq to increase its marketing plans and delivery systems, according to a filing to the stock exchange.
Lashou, which was launched in March 2010, operates in 500 cities or towns in China. Its business model is pretty much the same as Groupon Inc, where users buy discounted deals from merchants who have revenue-sharing agreements with Lashou.
China’s group buying sector is intensely competitive and saturated with more than a thousand group buying websites and Lashou faces an uphill battle to win a lion’s share, analysts say.
“E-commerce in China is hyper competitive, much more than the U.S., and if any sector stands out as highest risk for lowest return, then it is group buying,” said Michael Clendenin, managing director at Shanghai-based consultancy RedTech Advisors.
Groupon is also in the process of filing its books for its IPO to sell 30 million shares at $16 to 18 apiece. Groupon may raise its price range due to demand.
For the six months ended June 30, Lashou made a loss of $60.57 million. Lashou’s sales and marketing expenditure rose from $6.2 million to $50.12 million in the first six months of 2011.
“The company is just barely two years old, burning cash on high marketing expenses and has some very strong long-term competitors in Taobao, Tencent and Renren,” he added.
China’s group buying industry was worth 2.79 billion yuan ($439 million) in transaction value in the second quarter, according to data from Beijing-based consultancy Analysys International.
Apple has as yet to debut its new iPhone 4S in China, but the device is already selling in Beijing’s gray market at whopping prices of up to about $2,000, reflecting the popularity of the iconic device in the country.
A vendor in one of Beijing’s Zhongguancun electronics markets said he was selling the 32GB version of the iPhone 4S for 13,000 yuan ($2,043). The 16GB version of the device was being sold for $1,729.
The vendor, who declined to give his name, said the phones had come from Australia and the U.S., where they had been originally bought. The phones are sold without a contract, and come unlocked.
Another vendor in the same electronics market said he was selling the 16GB version of the device for $1,391. By Monday, he had 30 units left, which had all been bought in the U.K. He expected the price would start to fall by $100 in the next week.
Demand for Apple products has been high in China, with the original iPhone 4 selling out quickly in Beijing stores when it was launched in September of last year. Apple said earlier this year that China is the company’s fastest growing market for the device.
The company has however launched its newest products in China sometimes months after they are first released in the U.S. To avoid the wait, Chinese consumers buy in the country’s gray market, where prices tend to be higher.
In the second quarter, 1.07 million iPads, including of both first and second generation, were sold in China, according to Analysys International. But 49% those devices were sold through China’s gray market, where products are purchased from overseas and then resold by local vendors.
The high number of gray-market iPad sales is partly driven by consumers wanting to buy the 3G version of the device, said Sun Peilin, an analyst with the research firm. In China, Apple only officially began selling the 3G versions starting in September, six months after they had already gone on sale in the U.S.
Chinese consumers have often had to wait months at a time, before the newest Apple products are officially launched in the country. While Apple’s iPhone 4S goes on sale in the
U.S. this week, the company has yet to say when it will hit stores in China.
China’s gray market has taken advantage of the delay in launch dates, usually by charging higher prices to consumers wanting to be the first to buy the product. In the past, Apple products have also proven to be so popular that official sellers will run out of stock, giving gray market vendors another opportunity to cash in, Sun said.
Another factor helping the gray market is how Apple products are cheaper to buy in the U.S., than in China. In the U.S., a 3G version of an iPad 2 with 64GB storage will cost $829. But in China, the price for the same device is at 6,288 yuan or $990.
This difference allows gray market vendors to price their products lower than Apple, while still earning a profit, Sun said.
The ‘hiPhone 5’ is selling for as little as 200 yuan ($31) on China’s top e-commerce platform Taobao, which is owned by Alibaba Group.
But one has to pay around 800 yuan for a more “genuine” one, according to some store representatives at a mobile phone market in Shanghai.
“Look at this. It’s not the same as the 300-400 yuan ones,” Shanghai-based daily Metro Express quoted a clerk as saying, pointing to one originally priced at 850 yuan.
The ‘hiPhone 5’ is based on leaked images of the yet-to-be-launched iPhone 5 and is thinner and with less rounded edges than the existing iPhone 4, according to the newspaper. However, it is extremely light, almost like a plastic toy, like most pirated mobile phones, it said.
Western governments have repeatedly criticized China for widespread violation of intellectual property rights, but pirated goods from branded watches, to bags and computer software can be easily found in shops.
Last month, an American blogger set off a media storm after she posted pictures of an elaborate fake Apple Store in Kunming, selling genuine if unauthorized iPhones, Macbooks and other widely popular Apple products.
The online game is a first-person shooter and players can take part in individual or group missions. The game, which features PLA weaponry and realistic battle scenarios, took 32 months to complete, the newspaper reported.
“I think it is possible the game will be made open online for Chinese military fans to download and play,” an anonymous PLA publicity officer was quoted as saying.
The final version of the game was launched on June 20.
China, home to the world’s largest Internet market by users, has more than 300 million online gamers, according to government statistics.
China’s online game market was worth 8.5 billion yuan ($1,31 billion) in the first quarter.