China Daily Global Edition (USA)
Will the monkey play havoc with China’s tech companies?
We Chinese love to wear something red during the Chinese Lunar New Year to exorcise evil spirits. If you do not, misfortune will hunt you down the entire year — so was I told by my grandma.
She had the scariest stories reserved for those who were born under the zodiac symbol of the upcoming year but failed to have a piece of scarlet cloth tied to their belt. The stories would turn a lovely New Year’s Eve into the most terrifying Halloween experience I have ever had.
A quick explanation for beginners: The Chinese zodiac is represented by a circle of 12 animals, meaning each animal will reemerge every 12 years in the Chinese calendar.
The Year of the Monkey will start on Feb 8, 2016. People born in most of 2004, 1992, 1980, 1968 and 1956 — just to name a few — are under the symbol of the monkey.
Many Chinese technology heavyweights, including Legend Holdings Corp Chairman Liu Chuanzhi, Huawei Technologies Co Ltd founder Ren Zhengfei and Baidu Inc CEO Robin Li, are all “monkey men”. When they enter their “year of fate” after a 12 year interval, will they wear a piece of red cloth for good luck? Or are problems inevitable in their business?
Liu is the country’s tech guru. He founded Lenovo Group Ltd, the world’s largest personal computer maker, from the scratch in the 1980s. Born in 1944, the year of the Wood Monkey according to its elemental sign, he will turn 72 this April.
He now controls Legend Holdings, Lenovo’s major shareholder. Legend’s investments are in the information technology, agriculture and healthcare sectors, which are likely to provide stable long-term returns. The biggest risk lies in Liu’s most valuable asset: Lenovo.
The hardware maker is undergo- ing a critical transition as the global PC market shows no sign of recovery. It is attempting to explore new businesses including consumer electronics, servers and even cloud computing for higher margins but will meet great headwinds in 2016.
It bought Motorola Mobility from Google Inc for $2.9 billion in a bid to revive the smartphone business, but Motorola kept bleeding money.
I see 2016 as the most difficult year since Lenovo became No 1 in the PC market. If it can achieve success in its mobile operations, it will stand tall for many years; if it fails, the company will only be remembered as the last dinosaur of the PC era to drop dead.
Huawei’s Ren is about six months younger than Liu. The founder of the world’s biggest telecom equipment manufacturer seems to be enjoying a golden age.
Ren said in January the company is looking to grow its annual sales of consumer electronics to a whopping $100 billion within five years. The company is challenging Samsung Electronics Co Ltd and Apple Inc in the high-end smartphone market while clinching top position in the enterprise market.
But Ren’s goal may be too ambitious to realize after all. To achieve the target, Huawei will need to maintain 30 percent revenue growth each year in its smartphone sales until 2020. It now sells around 70 percent of its handsets in China and its presence in the United States is next to zero.
Huawei tried to penetrate developed markets with its premium devices last year, but ended up offering discounts to dump inventory.
I believe Ren’s company will need to fight extremely hard in overseas markets in 2016, and its prospects are far from bright.
Also having trouble getting new business is Robin Li, founder and CEO of Baidu, China’s largest Chinese search engine.
Since the Internet went mobile, Baidu has not introduced any product which has seriously impressed users. From the microblog Weibo to WeChat, a mobile application, none of the most used services on my smartphone were developed by Baidu.
Li, who will turn 47 in November, needs to keep developing emerging technologies including auto driving systems, real-time translation, virtual reality technology and artificial intelligence.
But should the company make progress in these longshot projects, Li has to prepare for a tough Year of the Monkey anyway because these technologies are not yet ready to make a profit.