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Qihoo Reported To Have Lost Smartphone Partner Due To Recent Bad Press

|Includes: QIHOO 360 Technology Co. Ltd. (QIHU)

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Qihoo Reported To Have Lost Smartphone Partner Due To Recent Bad Press

First I should introduce two articles which suggest that the breakup might not be true and that the deal is ongoing:

All translations here are through Google: The first article is here and the second, here.

First article Title: "Huawei shining ship in August by the Ministry of certification"

Relevant Text:

"Phone Home Information Center, August 1, once came Huawei and Qihoo 360 both to the breakdown of news, but for the first 360 special machine "shine" or come to the reporters in the website of the Ministry of have seen this machine, Model Huawei U8836D, according to the official version, the machine will be listed in August shipment."

The fact that the Ministry of Certification document is provided may suggest an attempt to debunk the articles such as the one that appeared yesterday. The rest of the article appears to be promotional material and goes on to detail the specs and shows some images of the phone.

This article was one of the main reasons why I decided not to pursue this accusation any further and also stopped with professional translations at this point (below translations had already been performed). However, I'll keep this story on the watch list.

Second Article Title: "Test the water commerce Huawei false start to the Internet" (Here)

Both positive and negative suggestions in this article. Here is the sentence that leads one to believe that the deal is still in play:

"In fact, Huawei shines special for the machine with 360 co-operation is still underway, but Huawei for 360 low-key approach, the fundamental reason is that, Huawei began the road of self-built Internet brand."

Pro: Articles appeared in the press with supposedly inside staff members declaring the deal to be off.

First, in the immediately preceding article ‒ "Test the water commerce Huawei false start to the Internet" (Here) ‒ we find suggestion of a rift:

"Cooperation Initially, Yu Chengdong the excitement overflow in microblogging, but also on many occasions mentioned the 360. But more than a month later, Huawei 360 cooperation "cold treatment", the official voice no longer speak.

"The fundamental reason is that, Huawei has its own idea, e-commerce specifications, Huawei's new thinking on the development of the Internet strategy. "

The first part adds a little weight to the argument that a rift has taken place, if you believe that the second is merely how each party can save face.

The excerpts from the next article were professionally translated. This article appeared before the above mentioned articles, otherwise I probably would not have gone through with paying for it. Oh well. Here it is:

Titled: "Huawei's internal management confirms that it is cancelling its partnership with Qihoo 360: Exclusive behind the scenes news of the farce"

This particular copy was pulled from China National Radio Network: Google Translation, here; the original, here.

The article opens,

"Recently, internal employees of Huawei have leaked out the news that Huawei's management has decided to cancel the partnership with Qihoo 360, although the exact reasons are unknown. But information from an internal meeting shows that Qihoo 360's own internal problems were a key factor in the termination of the partnership. Previously, the two machines specially provided by Qihoo 360 failed disastrously."

Information on the "disaster" with the other two machines will be covered in this same series, in other blogs. Please refer to the "table of contents." This break up had been rumored to have taken place for over a month, and so just when I thought it had been finalized, and after paying for the translation, the other two articles (above) appeared and put on the brakes for further research. We'll just have to wait and see what happens. Time will tell.

"According to the source, Huawei is a company that places great importance on the brand, and could not tolerate mobile phones with malicious software that causes chargebacks and delibrate leakage of user data. Before this, industry experts have analysed that the only hope of the continued partnership between Huawei and Qihoo 360 was if Qihoo 360's software was not packaged with the phones for sale, but such a move would not benefit Zhou Hong Yi at all."

The next few sections of the article deal with the immediately preceding "disaster" where Qihoo 360 was blamed for the leakage of use data. This I will cover in the other blogs related to this one. See the "Table of contents."

This particle article ends with a hard hit, and keeps up the suspicion that this might just be a smear:

"A famous media 'Mobile Information' wrote: 'After 3 rounds of wrangling, it is time for answers from Qihoo 360. Right now, the outlooks seems poor, whether it is for consuming the bottom line to salvage the last vestiges of hope, or a quick and painless execution. The 360 Special Phones has breathed its last'"

As mentioned earlier, the rumor of a breakup between these two is not new. It has persisted since the first announcement of the "cooperation" a little over a month ago. It is however a bolder declaration of the breakup. But it is contradicted by other articles, as mentioned above.

The breakup itself would not seem t affect Qihoo's ongoing revenue story. What it would do however is shed light on the other more serious incidents detailed in the other blogs and which apparently would be a factor in any such breakup.

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Disclosure: I am short QIHU.