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from Breakingviews:

China smartphones set to pick off global giants

By Ethan Bilby

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Not everyone is able to spend $500 on a smartphone. For those lacking funds or wanting better value for money, China’s handset makers increasingly appeal. Today, most of their sales are domestic. Yet low costs are helping them dial in new emerging market customers.'

Chinese brands have quickly seized control of their home market. Just a few years ago, the likes of Nokia and HTC were major players. Now upstarts like Xiaomi dominate. In the three months to June, domestic manufacturers produced more than three out of every four handsets sold in the People’s Republic, according to Canalys analysts.

Assuming Lenovo completes its acquisition of Motorola, roughly 40 percent of phones shipped worldwide in the second quarter were Chinese-owned brands. Yet manufacturers like Coolpad and Huawei do much better at home than abroad. In the rest of the world, the market share for Chinese manufacturers is only 19 percent.

from Breakingviews:

Bouygues’s latest SFR offer may still fall short

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Bouygues’s latest pitch for SFR may still fall short. The French building, TV and telecoms group has made a new offer for Vivendi’s mobile unit, with 1.85 billion euros more cash and heavyweight backers. That puts extra pressure on preferred bidder Patrick Drahi, soon after he began three weeks of exclusive talks to buy France’s no. 2 wireless carrier. But Bouygues still poses greater antitrust risks. It may need to offer more equity in the combined vehicle - and a big break fee.

from Breakingviews:

Valuing Tencent’s chat app remains an act of faith

By Robyn Mak
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Putting a value on WeChat remains an act of faith. Internet giant Tencent has shed some light on its popular messaging and social media service. But sparse details on costs and regulatory risks make future growth and earnings potential hard to pin down. Valuations are still largely based on hope.

from Breakingviews:

Candy Crush maker picks $7.6 bln IPO from thin air

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The maker of the popular game “Candy Crush Saga” has picked $7.6 billion out of the thin air for its initial public offering. King Digital Entertainment uses creative metrics to justify its whopping valuation. But there’s no way to calculate what an enterprise is worth when its profit can skyrocket 70-fold one year and could collapse the next. Rival Zynga’s IPO flub serves as an apposite warning.

from Breakingviews:

How on earth can Facebook justify WhatsApp price?

By Peter Thal Larsen and Rob Cox
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

 

For mere mortals who haven’t partaken in whatever Kool-Aid Mark Zuckerberg is serving at Facebook’s Hacker Way headquarters, is there any way to justify the $19 billion it is paying for WhatsApp?

from Breakingviews:

Candy Crush destined to be a heartbreaker

By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Candy Crush is destined to be a heartbreaker. The addictive mobile app’s Europe-based maker, King Digital Entertainment, is ready to capitalize on the hype with an initial public offering in the United States. With top hit “Candy Crush Saga” generating about 80 percent of revenue, though, investor infatuation would be a dangerous game.

from Breakingviews:

Standalone Vodafone starts to look healthier

By Quentin Webb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The standalone Vodafone is starting to look healthier. The mobile telecom operator will become dramatically smaller after it quits the United States and returns $84 billion to its shareholders. Elsewhere, its sales have been falling faster and faster. Now it looks like the worst is past and Vodafone hopes to ride a boom in mobile data. Yet for investors, the top question is what part the group will play in future M&A.

from Breakingviews:

Facebook mobilizes back to square one

By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Facebook has at last mobilized back to square one. Its shares finally broke back above the $38 price set in the company’s messy initial public offering 14 months ago. That’s largely thanks to Chief Executive Mark Zuckerberg making the social network’s platform work on smartphones and tablets even as his tech rivals mostly flounder at the task.

from Global Investing:

Russia’s consumers — a promise for the stock market

As we wrote here last week, Russian bond markets are bracing for a flood of foreign capital. But there appears to be a surprising lack of interest in Russian equities.

Russia's stock market trades on average at 5 times forward earnings, less than half the valuation for broader emerging markets. That's cheaper than unstable countries such as Pakistan or those in dire economic straits such as Greece. But here's the rub. Look within the market and here are some of the most expensive companies in emerging markets -- mostly consumer-facing names. Retailers such as Dixy and Magnit and internet provider Yandex trade at up to 25 times forward earnings. These compare to some of the turbo-charged valuations in typically expensive markets such as India.

from Breakingviews:

Profit first casualty in China’s mobile ad war

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China’s online giants are tooling for the mobile ad wars, and profit will be the first casualty. Of 560 million web users, three-quarters are already using smartphones, threatening massive disruption for companies who depend on online advertising revenue. Baidu, the dominant search provider that reports earnings on Feb. 4, has most to prove, and most to lose.

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