Huawei tops China smartphone market for first time in years
The hardware giant held on to a roughly 18 per cent share of the market in the June quarter, while other leading competitors such as Vivo and Oppo slumped, according to IDC data. The Shenzhen device maker showed greater resilience than rivals as overall shipments in China fell 4 per cent to 69 million units.
Huawei's recovery follows years of US export restrictions, which spurred the company to develop its own hardware and technologies, including artificial intelligence chips.
In 2024, Huawei launched several smartphones powered by domestically designed and manufactured semiconductors, including the world's first commercially available device with two folds. It's also added smartphones with its own operating system, transitioning away from Google's Android.
IDC researchers saw the first decline in China shipments after six consecutive quarters of growth, attributing that to diminishing help from government subsidies.
'Despite the recent US-China trade truce, the broader economic environment presents ongoing challenges, with consumer confidence remaining subdued,' said Arthur Guo, senior research analyst at IDC China. 'A significant uplift in smartphone demand is unlikely in the immediate term.' BLOOMBERG
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Business Times
4 hours ago
- Business Times
The AI race has big tech spending US$344 billion this year
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'We have basically tripled capex investment in cloud due to AI,' Bloomberg Intelligence analyst Mandeep Singh said. The emphasis from virtually every company executive during this earnings season was on investing as quickly as possible to get ahead. 'We need the teams to execute at their very best to get the capacity in place as quickly and effectively as they can,' Microsoft chief financial officer Amy Hood told analysts in a call on Wednesday. Susan Li, Meta's CFO, said the goal of its own spend is to secure the advantage 'in developing the best AI models'. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Wall Street's response has been mixed. Meta was rewarded – in large part because the company posted a strong second-quarter sales beat and issued a rosy revenue forecast, signalling that the billions it's spending on AI are paying off. 'On advertising, the strong performance this quarter is largely thanks to AI unlocking greater efficiency and gains across our ad system,' chief executive officer Mark Zuckerberg said on an analyst call. Zuckerberg has plans to build several massive data centres and has been luring top AI researchers with compensation packages valued at hundreds of millions of US dollars. The company recently restructured its internal AI division, now referred to as Meta Superintelligence Labs, in an effort to build human-level AI capabilities and apply that technology across its products. Shares of the company have gained more than 8 per cent since it reported earnings on Wednesday. Amazon, on the other hand, failed to convince investors that its lavish spending has been worth it. The stock was down as much as 8.1 per cent on Friday after the company reported tepid sales from its cloud division. The results were 'especially disappointing' given the strong performance from Google's and Microsoft's own cloud services, according to Bloomberg Intelligence (BI). And the ongoing capital costs will not help. The operating margin for Amazon's cloud unit will continue to face pressure 'through 2026 as capital spending ramps up', BI analysts Poonam Goyal and Anurag Rana said. Alphabet's shares are essentially unchanged from last week when it reported earnings and issued guidance. The company raised its capital expenditures outlook by US$10 billion and expects to ramp up spending even more in 2026. chief executive officer Sundar Pichai explained that the investments are necessary to keep up with customer demand. 'Obviously, we are seeing strong momentum across our portfolio, and especially in cloud,' Pichai told analysts in a call on Jul 23. 'It's a tight supply environment, and we are investing more to expand.' 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But the iPhone maker did raise its spending estimates, tying much of the increase to AI efforts. Apple's property, plant and equipment investments totalled US$9.47 billion in the nine months ended Jun 28, up nearly 45 per cent from a year ago. 'You are going to continue to see our capex grow,' chief financial officer Kevan Parekh told analysts on Thursday. 'It's not going to be exponential growth, but it is going to grow, substantially. And a lot of that's a function of the investments we are making in AI.' BLOOMBERG
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5 hours ago
- Business Times
Wall Street banks lose ground in Europe as tariffs spook clients
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Business Times
11 hours ago
- Business Times
Buffett's Berkshire hit with US$3.8 billion Kraft Heinz charge
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Kraft Heinz is now contemplating a spinoff of part of its business as it grapples with headwinds including inflation weighing on consumers' spending and people seeking healthier alternatives to its products. Last month, the company posted a decline in sales that wasn't as bad as analysts had predicted, in part thanks to higher prices. In recent months, Berkshire has signalled that it's taking a slight step back with its ties to Kraft Heinz. In May, Kraft Heinz announced that Berkshire gave up seats on the packaged foods company's board. And because Buffett's company is now limited to what Kraft Heinz discloses publicly, Berkshire said it would start reporting its share of Kraft Heinz's earnings on a one-quarter lag. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The writedown, disclosed Saturday in a regulatory filing, was driven in part by the sustained decline in fair value. But the company also said it considered its relinquishing of those board seats and Kraft Heinz's push to evaluate strategic transactions when determining how much of a charge to take. 'Given these factors, as well as prevailing economic and other uncertainties, we concluded that the unrealised loss, represented by the difference between the carrying value of our investment and its fair value, was other-than-temporary,' Berkshire said in the filing. While Buffett's conglomerate said it owns 27.4 per cent of Kraft Heinz stock at the end of June, the writedown could ease the path to a reduction of that holding in the future, according to Edward Jones's Sanders. 'I think they're giving themselves more flexibility to potentially exit their position in the future,' he said. 'This is one of Warren's largest missteps in the past couple of decades. It might just be time to move on from it.' Cash hoard Buffett's cash pile ended up dropping 1 per cent in the three months through June, to US$344 billion, the first time in three years that the war chest has shrunk. Those funds had previously kept soaring to all-time highs as he struggled to find opportunities to invest. Buffett ended up taking a cautious approach to the stock market in the second quarter. He was a net seller of other companies' shares during the period, offloading about US$3 billion of equities. He even steered clear of Berkshire's own stock, forgoing any buybacks. He's been on the sidelines for repurchases for roughly a year now, despite the stock falling 12 per cent after Buffett announced in May that he would step down as chief executive officer at the end of the year. Buffett's perceived cautious stance towards the market, including his own stock, may weigh on Berkshire's share performance compared with the market, according to Sanders. 'The things that they need to do to get the stock working, they're just not willing to pull the trigger on yet,' he said. Operating profit Berkshire had a weaker second quarter at its operating businesses. Profit dropped 3.8 per cent to US$11.16 billion, driven by a decline in underwriting earnings at its insurers. Its auto insurer, Geico, posted pretax underwriting earnings that rose 2 per cent to US$1.8 billion in the second quarter. The unit's underwriting expenses surged 40 per cent in the period, as the company spent more to increase its policy count. 'They were behind their peers, they lost market share and it took a couple of years to turn the ship,' Sanders said. 'That comeback is finally on solid footing.' Berkshire's utility business, which runs Pacificorp, MidAmerican and NV Energy, posted a 7 per cent increase in operating earnings. The company said it is currently evaluating the impact of President Donald Trump's tax law as it accelerates the phase-out of clean energy production. At its railroad network operator, BNSF, operating earnings rose 19 per cent to about US$1.5 billion, an increase Berkshire attributes to increased productivity and a lower tax rate. The unit, which Berkshire acquired in 2010, has been caught up in dealmaking speculation in recent weeks. Two major competitors, Union Pacific and Norfolk Southern, struck a US$72 billion deal to create the first transcontinental railroad operator. BNSF's strong performance in the second quarter calls into question the necessity for the railroad to do its own deal to remain relevant, according to Cathy Seifert, an analyst at CFRA Research. 'We just came out of a quarter where they've had to write down a deal that didn't work out very well,' she said. 'So there's really a hesitancy to pay up when you've got a potential target that's been bid up in anticipation of you making a deal.' BLOOMBERG
