As it already warned, ZTE posted its second-straight quarterly loss, due to vastly trimmed margins in emerging markets, as well as contract delays and falling handset sales in China.
It made a net loss of 1.14 billion yuan ($183 million) in the three months ended Dec. 31, compared with its net income of 991.16 million yuan a year prior. Sales in the fourth quarter also fell 16 percent to 23.5 billion yuan ($3.78 billion).
In all, this makes it the first time ZTE has posted an annual loss, at 2.84 billion yuan ($456 million).
The company blamed the decrease in profit margin on low-margin contracts in emerging markets like Africa, South America and Asia, as well as its home market of China.
ZTE has spent the last 20 years aggressively expanding overseas, but often at the cost of profitability because of its slim profit margins as it undercuts European equipment makers in emerging markets such as India.
It recently said it will try to cut costs and make a profit in the first quarter by focusing on developed markets, instead.
ZTE has been lagging behind fellow Chinese rival, Huawei Technologies. The former recently announced it will increase its investment in 4G infrastructure, in order to catch up with Huawei, as the two compete for most 4G contracts from the three major carriers in China—China Mobile, China Unicom and China Telecom.
Huawei is the second largest global maker of telecoms equipment, while ZTE is fifth-largest.
As for its handset play, nobody is really staking a claim on the Android market the way Samsung is. According to Gartner’s latest report, Samsung has 42.5 percent of the global Android market, with the next vendor at just 6 percent. And it grew this share in just a year, eclipsing Taiwanese competitor HTC to leave it trailing by 30 percent at the end of 2012.
Across OSes, Samsung and Apple have the number one and two slot respectively atop the global share, at 29 percent and 21.8 percent, respectively, according to IDC. Huawei has 4.9 percent, Sony has 4.5 percent, and ZTE is fifth at 4.3 percent.
But ZTE has more to worry about than just the Samsung juggernaut. Its general focus on the low to mid-range Android handset market means that thinner and thinner margins make it less worthwhile to duke it out in emerging markets.
Its new plan to attack the high-end market is testament to that. The definition of a “smartphone” is changing to include a lot of lower end devices now, and isn’t just reserved for premium handsets anymore. And with about half a billion handsets this year to sell for less than $100, makers will have to sell an awful lot just to keep above the water.
Rocket Internet, the e-commerce startup incubator started by the Samwer Brothers, is once again ramping up its operations in emerging markets. Today it is announcing that Jumia, an Amazon clone launched last year in Africa, has received a €20 million ($26 million) investment from Summit Partners. Jumia is already active in Nigeria, Egypt and Morocco, and the company says that it will be using the new funds to expand to more countries in the region, as well as grow its business in current markets.
The new investment in Jumia — which, like Amazon, sells a range of products including mobile phones, baby & children’s products, books and home electronics – follows on from previous backing Millicom and JP Morgan Asset Management.
For Summit, the investment represents one more link to the Samwers’ global operation, specifically in efforts aimed at building out e-commerce businesses in emerging markets. Most recently, in December Summit invested $26 million in Asian Amazon clone Lazada; and it also has worked with Rocket Internet companies in Africa specifically, investing €20 million in Zando, an online fashion portal. Other Summit Rocket investments have included $50 million in decor site Westwing and stakes in Dafiti, Jabong, Lamoda and Zalando.
“We seek to invest in companies around the world that build long-term value,” said Scott Collins, MD and head of the Summit Partners London office, in a statement. “Jumia has established itself as a fast-growing company early on, and we are pleased to partner with its management team.”
As with other efforts in emerging markets in Latin America, Asia and Eastern Europe, Africa represents a two-fold opportunity for Rocket Internet.
For starters, these are the markets where internet usage is growing the fastest, and where consumers are most new, and possibly most receptive, to the opportunities presented by e-commerce. In some markets like Brazil and Russia, for example, you could argue that the growth in internet usage underscores the rise of a new middle class of users who have the income and the acumen to look to the internet for the best deals. That means that the market is less crowded and more ripe for the taking for those companies investing big in their e-commerce businesses.
Second, because these are markets that have largely been untapped by bigger players like Amazon, eBay and Japan’s Rakuten, it could potentially represent a key exit opportunity for Rocket, should those giants want to move into these markets and choose the inorganic, acquisition route to do so. That’s certainly been a good strategy for the Samwer brothers in the past, again and again.
“We are excited to be joined by Summit Partners, a new investor that shares our aspirations for Africa’s e-commerce,” Jumia Africa Global co-CEOs Jeremy Hodara and Sacha Poignonnec said in a statement. “This investment, which comes on the heels of a previous investment in Jumia by Millicom and JP Morgan Asset Management, allows us to offer new categories of products, strengthen our operations, deliver to our customers even faster, and recruit the best talent.”
Summit, which has to date raised some $15 billion for its investment activities since being founded in 1984 in Boston, has also invested in Wildfire, now part of Google, and BigPoint, among other ventures.
Another service has jumped on the “easy” site creation bandwagon, this time a small startup out of the Philippines, called Infinite.ly.
The company competes with players like Wix.com to offer the HTML-challenged a way to get a website up and running, and offers a number of drag-and-drop widgets to do so.
Users are started off with a selection of templates which they can customize. Once created, a site can be previewed and published to the Web, as well as a separate version for mobile browsers. The site publishes a Facebook-friendly version of itself too, but is restricted by Facebook to hiding in a tab in a company’s page. When I tried it, the site ran quickly and smoothly on a cellular data connection.
The site also has a tie-up with a domain registrar to allow users to sign up for a custom domain within its interface.
In October last year, Wix started opening up to third-party developers by offering an SDK that would allow them to offer their content for Wix’s platform. The service had 25 million users at the time.
Infinite.ly’s founder, Luis Buenaventura, acknowledged that the company has stiff competition in the market in the form of Wix, but said that he’s eyeing some of the newer users in emerging markets such as his home country. The company is in the midst of talking to one of the larger banks in the Philippines, and might strike up a deal to cross-sell Infinite.ly to new small business owners when they open bank accounts.
Infinite.ly has a team of four full-time staff, and started in 2010 with $500,000 in seed funding from Filipino investor Winston Damarillo. The latter owns LA-headquartered cloud infrastructure company Morphlabs and Exist, a software development company in the Philippines.
Read the original: Site Builder Wizard Infinite.ly Leaves Incubation
Back in June last year, we reported that BBC Worldwide was launching a mentoring scheme for digital media startups called BBC Labs. Well, now the BBC’s commercial arm has announced a second programme for 2013.
The six month programme is aimed at emerging digital media companies in the UK, with a view towards helping the selected startups gain traction and scale by working closely with them. Back in August last year, BBC Worldwide announced the six (rather than five, as it originally planned) startups that would participate in the inaugural Labs scheme.
The next programme will kick-off with an induction session on March 5 at Wayra’s Academy in London, with attendees getting the chance to hear from Claude London, Digital Director, BBC Worldwide, who will lead a panel discussion with three of the programme’s current startups – Yakatak’s, Simon Davies; MiniMono’s Melissa Clark-Reynolds; and Flooved’s Hamish Brocklebank.
Last year’s final participants included WireWax, KO-SU, Flooved, Yakatak, MiniMonos and Foodity, the latter of which recently became the first Labs startup to ink a commercial deal with BBC Worldwide. This deal saw BBC Good Food and Tesco enter a partnership to bring the supermarket’s online shopping experience to GoodFood.com users.
“I am so proud of everything we’ve achieved with Labs over the past six months and thrilled to be announcing the launch of the second programme,” says Jenny Fielding, Head of BBC Worldwide Labs and Digital Ventures.
“It has been an honour and a pleasure to help raise the profiles of six bright and talented start-ups in the UK, all of whom have a promising future ahead,” she continues. “It has been a huge learning curve for us all and I’m very much looking forward to finding the class of 2013 and furthering our ambition of helping more emerging digital companies realise their ambitions.”
It’s worth noting that BBC Worldwide isn’t seeking to invest cash in the companies, or take equity for that matter. Instead, it hopes that it leads to commercial tie-ups – as with Foodity – while en route offering support from mentors and industry experts, giving access to intellectual property, content and technology and the use of office space in London.
If you want to participate, you can reserve a place at the induction session on March 5, or you can just go ahead and submit an application. The deadline for submissions is midnight (GMT) on April 4, 2013.