Finance

While Apple faces Indonesia ban, Chinese smartphone maker Honor enters

Published

5 months ago

January 6, 2025

Business Finance News

Pictured here is the Grand Indonesia shopping mall in Jakarta on Friday, Jan. 5, 2024.

Bloomberg | Bloomberg | Getty Images

BEIJING — Huawei spinoff Honor announced Tuesday it plans to launch smartphone sales in Indonesia by the end of March, becoming the latest Chinese company to enter a market that has banned Apple’s iPhone 16 over domestic production requirements.

Indonesia requires that for smartphones sold in the country, 40% of their components must be domestically sourced. That rule has prevented Apple from selling its newest phone in the market, where it is reportedly negotiating a $1 billion investment.

Honor has an office in Indonesia and is working with one local manufacturing partner, Justin Li, the Chinese company’s president of South Pacific operations, told reporters last week. He said a folding phone will be among Honor’s first set of locally sold products — 10 items in the medium to high-end segment.

The company aims to offer around 30 products from phones to tablets in Indonesia by the end of the year. The Southeast Asian country is home to the world’s fourth-largest country by population, just behind the United States.

“Although 80% of the market is dominated by devices priced under $200, as Southeast Asia’s largest and fastest-growing economy, Indonesia presents immense potential for long-term growth,” Canalys analyst Chiew Le Xuan said in an email.

“Indonesia is emerging as a key market in Southeast Asia, driven by rapid economic growth and an expanding middle class,” Chiew said, noting the country accounts for 35% of smartphone shipments in the region and can serve as a strategic regional hub.

As of November, Oppo, Xiaomi and Transsion — all China-based — held the top three spots in Indonesia by smartphone shipments, according to Canalys. Shenzhen-based Oppo in November held its global launch for its flagship Find X8 phone in Indonesia, where the company also has a factory.

Samsung ranked fourth in Indonesia with a 16% share, tied with Vivo, another Chinese brand, the Canalys data showed.

Excluding China and Japan, just under 8% of Apple’s sales come from Asia-Pacific.

Li claimed the decision to enter Indonesia was independent of Apple’s presence in the country, and was confident in Honor’s ability to compete. He said Honor had observed the Indonesian market for years, before doubling down on expansion efforts in the last half year.

While he declined to share a current breakdown of Indonesian to Chinese staff, Li said Honor is still hiring in the country and aims to have a predominately local staff in the future.

Honor plans to open at least 10 of its own stores in Indonesia this year, in addition to selling through a local retailer, Li said.

Outside of China, Honor primarily sells in Europe and parts of Southeast Asia. Its phones are not directly sold in the U.S. The company claimed that in December, more than half of its sales came from outside China for the first time.

Honor, which is planning to go public, was spun off from Chinese telecommunications giant Huawei in November 2020 after the parent company was hit by U.S. sanctions. Huawei said it does not hold any shares in Honor or have involvement in business decisions.

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

1 day ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

1 day ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”