HTC to cut back smartphones and staff after worst losses ever

This year has been a tough one for Taiwanese smartphone manufacturer HTC, with serious losses posted in the last quarter.

As such, the company has announced it's going to start cutting staff and reducing the number of smartphones in turns out each year.

In an earnings call this week, HTC posted its biggest ever quarterly loss of £163 million – that's in the three months leading up to June.

The firm, which saw strong performance from the HTC One M8 last year, has struggled to keep up with Apple and Samsung in 2015.

What's more, the HTC One M9 has faced tough criticism from reviewers, leaving HTC's flagship smartphone floundering.

The aforementioned losses were caused by "weaker than expected demand at the high end...along with weak sales in China," says HTC, speaking in a statement given to press.

The Chinese smartphone market is fierce right now, with big players like Xiaomi, Lenovo, Samsung, and Apple all eating into HTC's market share.

"Like Nokia and BlackBerry, few smartphone makers are able to turn around once they lose in the battle for market share," explains Jeff Pu, Yuanta Securities Investment Consulting analyst. "Consumers quickly forget you."

Related: HTC Vive vs Oculus Rift

HTC may have a saving grace in the works however, in the form of its upcoming HTC Vive virtual reality headset.

Developed in partnership with game development firm Valve, the Vive is set to launch in 2015's holiday season.

"The company is working with over 1,000 developers on content creation over a wide spectrum of applications including gaming, entertainment and education, to ensure a compelling ecosystem ahead of the highly anticipated launch of HTC Vive at the end of the year," says HTC.

Unfortunately, the Vive is facing stiff competition too, going up against the Oculus Rift, Sony's Project Morpheus, and the Samsung Gear VR.

Check out our 'Samsung Gear VR – Is this the future?' video below:

Source: HTC to cut back smartphones and staff after worst losses ever

Xiaomi, Huawei tops Chinese mobile market, Apple third

BEIJING: China's domestic smartphone makers Xiaomi and Huawei have regained top positions in the second quarter, pushing iPhone to the third position, amid concerns that the US phonemaker might not sustain its sales momentum in the world's biggest smartphone market.

According to the new figures, Chinese domestic brands will continue to dominate its smartphone market in the remaining half of 2015 as well.

Xiaomi, a late entrant to the Chinese smartphone market which effectively used social channels for marketing, achieved new records for sales volume during the second quarter and retained top spot with a 18 per cent market share.

Huawei also climbed up to second place, securing for itself a market share of 16 per cent, riding high on the success of its heavily promoted giant version of P8 phablet.

The world's most valuable public company, Apple retained third spot with a market share of 12 per cent, while Vivo bagged the fourth spot maintaining a market share of 10 per cent, state-run People's Daily reported.

Korean electronics giant Samsung, once the top smartphone vendor in China, fell to fifth position with a market share of 9 per cent only, despite launching its flagship phone, the Galaxy S6.

In 2010, CMNet market revenue was 17.2 billion yuan ($2.8 billion), it is estimated to expand to 251 billion Yuan ($41.8 billion) in five years, the report added.

Source: Xiaomi, Huawei tops Chinese mobile market, Apple third

Huawei and Xiaomi lead Chinese smartphone shipments

Domestic vendors Huawei and Xiaomi were responsible for one in three smartphones shipped in China during the second quarter of 2015, according to research firm Canalys.

Xiaomi regained its crown as the market's largest smartphone maker with a 15.9 per cent share, although Huawei was hot on its heels with 15.7 per cent. And Huawei was also the fastest growing vendor in the top ten, growing 48 per cent sequentially.

But China's smartphone market "continues to mature, remaining stagnant quarter-on-quarter", said Jingwen Wang, analyst for the firm.

"Huawei recorded the highest smartphone shipments in its history without compromising its product margin or profitability. Apple and Samsung have both increased their sales activities in the China market, expanding rapidly in channel coverage through flagship stores and small to medium size phone retailers respectively. Xiaomi is under immense pressure to maintain its top position in the quarters to come," the researcher continued.

Apple took third place in the market, followed by Samsung and Vivo.

Source: Huawei and Xiaomi lead Chinese smartphone shipments

Apple falls to third in China smartphone rankings, while Xiaomi vaults ahead

Xiaomi regained its position as China's leading smartphone vendor in the second quarter, while Apple fell to third place despite increased sales of its iPhones.

Xiaomi took 15.9 percent of the Chinese market in the April-to-June quarter, according to research firm Canalys, followed by Huawei, which had 15.7 percent and was the fastest growing vendor.

It's an impressive feat for both Xiaomi and Huawei. China is the world's biggest smartphone market and competition is more fierce than ever, with Apple, Samsung, and dozens of smaller local vendors all fighting for a bigger piece of the pie.

All of this is happening as the rapid growth in China's smartphone market is starting to fizzle out.

Samsung, once the top smartphone vendor in China, has seen its market share tumble. The Korean electronics giant ranked fourth last quarter, even though it launched its newest flagship phone, the Galaxy S6.

Apple apparently struggled compared to its rivals, falling to third place. And this despite reporting strong growth in China in its recent earnings report. Canalys didn't release its estimate for Apple's market share; it's full report on the China smartphone market is due later this week.

Chinese consumers are buying more phones from homegrown vendors such as Xiaomi, Huawei and Lenovo. Many of their phones are cheaper than an iPhone or a Galaxy but come with similar specs.

Xiaomi has grown quickly by selling feature-packed Android phones at low cost. It made an art of marketing itself through social channels, building a strong fan base among young Chinese and keeping costs down by selling its phones online.

However, in China's slowing market even Xiaomi might struggle to reach its sales goal of selling 80 million phones this year.

"Competition among major brands has never been so intense," Canalys analyst Wang Jingwen said in a statement. "Xiaomi is under immense pressure to maintain its top position in the quarters to come."

Rival Huawei nearly toook the top spot itself in the second quarter. The company's higher-end phones are taking off, and not only gobbling up market share, but generating more profit.

Source: Apple falls to third in China smartphone rankings, while Xiaomi vaults ahead

Xiaomi overtakes Apple as number one smartphone vendor in China

The Xiaomi Mi 1, Mi 2,Mi 3, Mi 4, and the Mi Note. Xiaomi/Ron Amadeo Further Reading Xiaomi's plan to take over the world: One handset, tablet at a time

No phones in US just yet, but mi.com launches Stateside in "a few months."

Two domestic smartphone makers in China have rocketed to the top of the country's sales charts, according to new industry analysis firm Canalys.

New quarterly estimates from March 2015 through June 2015 show that Xiaomi has the top spot at 15.9 percent of the Chinese market share, with Huawei nipping at its heels at 15.7 percent.

Apple, which had been number one for the past two quarters, has fallen to number three. Samsung and Vivo slide in at four and five, respectively. CNET notes that Canalys didn't offer Apple's current market share when announcing the new quarterly figures. A different analyst, Counterpoint Research, forecast market share numbers of 15.8 percent for Xiaomi, 15.4 percent for Huawei, and 12.2 percent for Apple.

"Competition among major brands has never been so intense," Jingwen Wang, a Canalys analyst, said in a statement. "Huawei recorded the highest smartphone shipments in its history without compromising its product margin or profitability. Apple and Samsung have both increased their sales activities in the China market, expanding rapidly in channel coverage through flagship stores and small to medium size phone retailers respectively."

Xiaomi has rapidly expanded in other Asian countries, and the company now has its sights set on Russia, Brazil, the Middle East, and more Latin American countries. It has not yet debuted in the United States, but Xiaomi held its first media event in San Francisco in February 2015.

That same month, Ars concluded that the Mi Note, the company's phablet, "has again blown us away with its ability to make a better product for less money." We were similarly impressed with the Mi 4 smartphone in June.

Source: Xiaomi overtakes Apple as number one smartphone vendor in China

'White hats' on China's internet are growing rapidly

via Flickr See Also The suspected Chinese hack on United Airlines makes the CIA's job 'much more difficult' The 29-year-old hacker who was able to take control over GM cars tells us how easy it was to pull off There's a major security flaw in hundreds of millions of Android phones that leave them exposed to hackers

Cybersecurity specialist Wang Qi gets more than a little irritated at how Chinese society often views IT geeks like himself - as socially inept and isolated guys who dress like penniless slobs.

"In fact, some think we don't deserve to have a decent position in society," says a testy Wang, 35, an established "white hat" - a hacker who identifies weaknesses in internet security with the aim to improve it.

It's perhaps understandable for Wang to have a chip on his shoulder - his expertise is fast becoming one of the most important jobs in the modern world. A former senior security specialist at Microsoft China, Wang has set up his own cybersecurity venture, Keen Team, and gained an internal reputation in the world of white hats.

"The demand for security protection from businesses is rising rapidly, thanks to non-stop advances of the internet technology," says Wang.

Set up in 2011, his Shanghai-based internet security company has now become an adviser for technology giants including Apple and Huawei.

Hackers are getting bigger, bolder and faster as digital technology is integrated more deeply into everyday life, according to the latest report by Symantec. Cyberattackers are infiltrating networks and hijacking the infrastructure of companies and turning it against them, while extorting end-users through their smartphones and social media to make some quick cash.

In China, the non-profit National Computer Network Emergency Response Technical Team said the number of data leaks recorded had tripled since 2013 to 9,068 instances in 2014. As businesses try to fend off the rise in cyberattacks, it is becoming more lucrative to join the country's burgeoning cybersecurity industry.

That may explain the rapid growth in the number of white hats in China's internet landscape over the past three years. A report published by Chinese internet security company Qihoo 360 said numbers have risen rapidly in recent years.

REUTERS

On the Qihoo platform alone, the number of white hat hackers registered to help businesses spot vulnerabilities within their systems jumped from 2,490 in 2014 to 13,812 this year. Most (63.8 per cent) were born in the 1990s, while those born in the 1980s make up 34.4 per cent, the Qihoo report said. Of those registered last year, only four (less than 0.2 per cent) were women.

But, as in many other segments of digital business, cybersecurity companies find it tough to retain talent.

"Brain drain is a chronic problem in this emerging community of white hat hackers," Wang says. "The most talented can be easily enticed to a well-established technology company, so we try to keep people engaged by organising more off-line activities."

Last year, for instance, his company co-organised GeekPwn, a mainland version of international security geek contest Pwn2Own, to attract talent.

Wang, who holds a master's in information technology from Shanghai Jiao Tong University, made an impression at the Beijing event by using a smartphone to gain control of a Tesla electric car. He and his team were able to do so after spending 100 days figuring out the vulnerabilities of the vehicle.

Tesla

Keen Team has started to make a name for itself at Pwn2Own, which has been held since 2007 at the CanSecWest computer security conference in Canada. With cash prizes from companies such as Google and Apple as rewards, contestants try to reveal unknown weaknesses in widely used software and smart devices and their findings help gauge progress in improving security.

At the Mobile Pwn2Own contest held in Tokyo in 2013, Keen Team participants managed to break into Apple's web browser, Safari, within 30 seconds, winning themselves US$40,000. Keen developers claimed the number of security risks they found in iOS was more than double that disclosed by Apple.

At the event in Canada last year, Keen Team collected US$140,000 in prize money from two other exploits.

Life is undoubtedly better these days as a young white hat in China. Even without a job offer from a technology major, it's possible to earn enough from competitions and advising companies to live comfortably.

"An income of about 20,000 yuan [HK$25,000] a month is the average, so having a relatively affluent lifestyle is not a real problem," says Luo Qinglan, founder and CEO of Moule, another Shanghai-based cyberspace security start-up.

Patrick Lux/Getty Images

"What really makes young hackers fixate on the job is passion," says Lou, 27, who leads a team of more than 30 white hats in his company.

"All are cyberspace security fanatics, and what I am doing is merely setting up a fair and liberal workshop where we can get together to enjoy research on information technology."

As for the young white hats in China, typing away at a keyboard and sleeping on a couch for days to concentrate on breaking one security loophole is nothing unusual. It's estimated that it takes 78 days on average to uncover a single vulnerability.

Now gearing up for a second round of fundraising, Moule has collaborated with dozens of public agencies and companies, particularly in the booming e-commerce sector. Its partners include ventures such as Yihaodian, a major online grocery shop, and Dianping, which operates a Yelp-like user review website where customers can purchase dining coupons.

"Living in the bubble of online finance and e-commerce, people rarely realise that some of our most important personal and financial information are placed up the cloud, a network of remote servers used to store, manage, and process data," says Luo, who studied computer science at Donghua University in Shanghai.

Stringer Shanghai/Reuters

About 26 per cent of security vulnerabilities are found on e-commerce websites, according to the report released by Qihoo 360 earlier this year.

But while IT geeks find it thrilling to make breakthroughs mining vulnerabilities, raising awareness in the business community about the need for cyberspace security remains a challenge.

Many business executives regard investment on security upgrades as a huge cost, rather than a pre-emptive measure to hedge against cybercrimes, according to a 2014 global survey by consultancy Ernst & Young.

"Cybersecurity is not seen as an added-value activity and is viewed as a cost which needs to be limited as much as possible," the report said. Less than 20 per cent of organisations have real-time insight on cyberspace risks, and 63 per cent consider budget constraints as the main obstacle to investing more on security upgrades.

Meanwhile, the cyberattacks keep coming. "Apart from those people who hack into websites for sport, many malicious hackers target organisations for money," Luo says.

Wang says: "Even though the cost of upgrading security system is rising, it's merely heading to its normal level given the ever more pervasive cyberspace attacks and the fact that its value was much more underestimated in the past." More people are coming around to this conclusion, however - the recent GeekPwn contest in Beijing awarded three million yuan in cash prizes.

Read the original article on South China Morning Post. Enjoy the full SCMP experience here: click here to get your subscription offer with US$38 gift voucher. Copyright 2015. Follow South China Morning Post on Twitter.

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Source: 'White hats' on China's internet are growing rapidly

Meet the Vietnamese smartphone maker gunning to be the next Apple

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HANOI, Vietnam -- The lights in the conference room flickered a couple of times and then turned off completely. The hum of the air conditioner quieted and the room became still -- unnaturally so for a technology company trying to enter the noisy smartphone business.

I was at the Hanoi headquarters of BKAV, a Vietnamese company that's made its money selling security software but now wants a piece of the $2.2 billion smartphone market here. The electricity in the building -- located around the corner from the city's tallest skyscraper, the Keangnam Hanoi Landmark Tower -- sputtered in the middle of a presentation about the company's first phone. I'm told it "happens sometimes."

In early June, a few wee ks before I arrived here, BKAV launched the Bphone, which it touts as the first smartphone designed and made in Vietnam. The sleek device, which comes in six models and costs about $450 to $925, is reminiscent of an iPhone 4 -- but with a bigger, 5-inch screen versus Apple's 3.5-inch display.

BKAV's mission is part of a technological revolution happening in Vietnam. Most of the investment in the country, however, has come from foreign companies looking for ways to more cheaply build their gadgets. That's why BKAV stands out; it's a homegrown company with the goal of building a pricey phone for locals. In some ways, it's following in the footsteps of China's Xiaomi, which built up global credibility for its low-priced smartphones by catering to its home market first.

BKAV's sights, though, are squarely aimed at the premium market.

Making a high-end smartphone "is the dream for every high tech corporation in the world," said Ta Minh Hoang, the BKAV mobile product director who led development of the Bphone. "Making a smartphone is also our dream because we want to become the best technology corporation in the world."

Ta Minh Hoang, BKAV mobile product director, shows off the company's first smartphone, the Bphone, in the company's Hanoi headquarters. Shara Tibken/CNET

The Vietnamese aren't afraid to spend money on electronics. Last year, 24 million mobile phones were sold in Vietnam (the population totals about 94 million), according to Strategy Analytics. Smartphone demand is expected to soar here over the coming years.

Sounds great for BKAV, right? The problem is the Vietnamese aren't clamoring for a "made-in-Vietnam" phone. They're happy with their iPhones and the Galaxy devices offered by Samsung. With workers typically making less than $150 a month, the Bphone is too pricey for many. The boastful nature of BKAV's CEO -- who calls Bphone the best smartphone the world -- also goes against the grain of typical Vietnamese humility and has turned many people off. Others are skeptical the company actually designed and manufactured the Bphone here.

"If you can't prove that you make any hardware parts and can't show where your factory is located, then how can it be made-in-Vietnam?" a user id entifying himself as No Banh Nha Lau commented on an article about Bphone in May.

Designed in Vietnam

But it was that very factory where I headed next. A run-down industrial complex covered with green corrugated metal, just a 10-minute drive away from BKAV's headquarters, is home to one of two facilities where BKAV workers build the Bphone.

When I visited BKAV's phone assembly plant, about three dozen people were suited up in blue-and-white uniforms. Think a cross between doctor scrubs and mechanic garb. Everyone wore white cloth gloves, surgical face masks and blue cloth hats with rims to keep strands of hair from falling on the smartphone parts.

The workers sat on rolling office chairs in front of small green assembly lines that resembled long, skinny ping pong tables. Each was tasked with a part of the process, which included dusting off the components or snapping on the backplate of the smartphone. Normally, there are about 100 people in that factory, but I arr ived at lunchtime.

Another 50 people work at BKAV's mechanical factory nearby, creating Bphone parts like the metal body, SIM card holder and speaker box. They also build device prototypes and models of other components before hiring partners to manufacture them. BKAV plans to open a bigger factory in the Hoa Lac Hi-Tech Park in suburban Hanoi, about 30 kilometers from its current factories, "when we get good feedback from the market," said Vu Thanh Thang, vice president and director of BKAV's hardware division.

BKAV spent about $20 million, relied on 200 engineers and took four years to develop its first smartphone. It designed everything from the motherboard housing the phone's components -- including a high-end, but older, Qualcomm processor -- to the device's exterior to the software that runs on top of Android, Google's mobile operating system software that powers the majority of phones in the world. The Bphone Operating System, or BOS, comes packed with many BKAV- designed apps, including a browser (Bhrome) and a dialer/Internet-based calling app (Btalk). Another key feature of BOS: Its antivirus software.

BKAV assembles its Bphone in a factory that's a 10-minute drive from its Hanoi headquarters. Shara Tibken/CNET

BKAV uses the "made-in-Vietnam" label as one of Bphone's biggest selling points.

"We want [to show] that Vietnam can do the high-grade products like America or Japan or Korea," said Bach Thanh Le, BKAV's vice president and chief information officer.

But it's the use of components from foreign companies that has tripped people up. Before the device hit the market, some questioned whether Bphone was really made and designed in Vietnam or whether the smartphone was actually a Chinese device. Other Vietnamese vendors, such as MobiiStar, have contracted Chinese manufacturers to design and build smartphones that they slap their brand on. And there's a debate over whether a company can claim a phone is "made in Vietnam" or any other location if it uses components from other places, like that Qualcomm processor.

"Why do some people think that Bphone is not really a Vietnamese phone?" BKAV CEO Nguyen Tu Quang said over e-mail . "Because it's hard to believe that Vietnam can design and manufacture a world's leading smartphone."

'Explosive Quang'

BKAV's 40-year-old CEO isn't what you'd call modest. He built the first version of his BKAV antivirus software as a third-year university student in 1995 and formed his company to commercialize the software a decade later. Today, BKAV is one of the biggest security software companies in Vietnam, with a branch in Mountain View, California -- the heart of Silicon Valley.

Quang has a reputation as a workaholic, and he's well known by his nicknames -- "Explosive Quang" and "Quang the bomb thrower" -- due to his boastful nature.

When he first teased the Bphone in January at the Consumer Electronics Show in Las Vegas and again when launching the device in May, Quang called it "unbelievable" and a "masterpiece." He dubbed it the world's best smartphone.

"I strongly believe that when holding it in your hand, you'll think like me: one of the world' s most beautiful smartphones," Quang said at the May event, according to the English subtitles of a BKAV video.

Quang dismisses the criticism, saying talking up a company's products is the job of a CEO, even if doing so is not popular in Vietnam.

For some, the hype has worked. Nguyen Viet Phu -- a 41-year-old Hanoi resident who works for Vietnam Television, the country's national broadcaster -- bought a 64-gigabyte champagne-colored Bphone as soon as it became available. He wanted to see what a Vietnamese phone would be like after he lost his iPhone 5S.

"Bphone really is a beautifully designed phone," he said over e-mail. "I am very satisfied with the device."

For others, Quang and BKAV's bluster has backfired. And countless others in Vietnam aren't even aware the Bphone exists. A couple looking at smartphones in a large electronics store near Hanoi's posh French Quarter said they'd never heard of the device.

Apple, Samsung mania

BKAV's lower profil e is a critical problem. Even heavy hitters of the past like Nokia and Sony draw more interest.

But Apple and Samsung displays are often the first thing buyers see when they walk through the doors of electronics stores. Nearly every block in Hanoi, the capital of Vietnam, has a store hawking the iPhone or using the Apple logo to draw in customers. Dang Dung Street in the center of the city features pawn shop after pawn shop selling -- what else? -- iPhones and iPads. The Apple logo appears on everything, from motorbike helmets to the bright pink hoodie worn by a female tailor in Hoi An. This is pervasive, even though Apple doesn't have a store in Vietnam.

Apple and Samsung devices are popular with Vietnamese gadget buyers, and stores often use their names to lure in shoppers. Shara Tibken/CNET

"I don't have the money right now, but if I have the money, I want to buy an iPhone," Dao Dat, a 20-year-old who's working part time while learning English to become a teacher's assistant, said through an interpreter at the VinPro store. He'd have to save for a year to afford an iPhone 6.

Just as prevalent are stores selling Samsung devices, and billboards from the South Korean company line the roads. Samsung has invested nearly $9 billion over the past seven years to build Vietnamese facilities to assemble its latest devices. More than half of the smartphones sold in Vietnam in the first quarter came from Apple and Samsung, according to Strategy Analytics.

Nowhere near as ubiquitous is BKAV. The company's challenge is to convince people to ditch their favorite brands for a made-in-Vietnam phone, while forking over hundreds of dollars for it. BKAV executives claim Bphone buyers get a high-end phone at half of what they'd pa y for an iPhone or Galaxy S device. But if you're going to shell out hundreds of dollars, why not hold out for the flashier brand?

"The price is way too high," a user named Anh Tuan posted online, as translated to English from Vietnamese. "I'm a patriot and willing to support made-in-Vietnam products as long as the value meets the cost. Don't let the love for your country be used as a marketing ploy."

BKAV's limited rollout could hurt Bphone's prospects. Vietnam is a country where most consumers buy their devices in physical shops, while in China, Xiaomi has sold millions of devices by holding flash sales on the Web. BKAV only offers its device online, and it's selling Bphone in phases. The first batch went on sale June 2, and the second will take place in August.

BKAV sold 11,822 Bphones during its first go-around, but that's a sparse compared with the 2.1 million handsets Xiaomi sold during a 12-hour flash sale in April or the 10 million iPhone 6 and 6 Plus unit s Apple sold in the first weekend they were on the market in 2014.

Generating high sales volume isn't the main priority, said BKAV executives, who say they also value the importance of making a good impression. The company offered a two-week return policy to give customers time to try out the device -- something that's virtually nonexistent in Vietnam, where most sales are final.

But sales eventually will have to matter if BKAV intends to stay in the market for the long haul. Looking ahead, it wants to go after other markets in Asia, such as India, and possibly even the US within the next year or so. The company has enlisted Qualcomm to help it work with wireless carriers including Verizon and AT&T, the top two carriers in the US.

"The global market is our final goal, you see, as Apple or Samsung [has done]," Le said. But "if the domestic market is not good, we cannot have the basic requirement to go forward. So in the near future, we have to convince the Vie tnamese people to believe [in] this product."

Source: Meet the Vietnamese smartphone maker gunning to be the next Apple