When LeEco (Leshi Internet Information & Technology) exhibited at one of the press-and-analyst shows at CES 2016, it had not yet changed its name from Letv. Letv showed prototypes and products that were notable both for their variety and strikingly handsome industrial designs.
Some of those products also contained advanced components. At Qualcomm’s CES press briefing, the company said the Letv Le Max Pro was the “first announced smartphone” to use Qualcomm’s Snapdragon 820 processor, as well as the phone with the “first announced support” for Multi-gigabit 11ad in a smartphone. Early members of the Le Max family went on sale in China in July 2015, and quickly became the best-selling high-end phone in China, topping both Apple and Samsung, according to Sino Market Research.
But the change of name from Letv to LeEco is appropriate because the company’s focus is on a global ecosystem strategy it calls “Le Ecosystem” — an Internet-based platform encompassing content and applicatons, as well as devices. The company also has a dizzying array of other businesses, including eco-agriculture, Internet-connected electric cars, and a cinema production company.
The LeEco Group (Beijing) started when Jia Yueting establilshed Letv.com in 2004. Now called Le.com, it is among the largest on-line video providers in China. LeEco started its TV hardware business only recently, in 2013. According to IHS, LeEco “focuses on the growth of the paid content subscription, while it sells TV hardware at below manufacturing cost or even provides it for free during promotional periods.” Please keep that in mind as you read the following paragraphs.
On July 26, as is well known in our community, LeEco and U.S.-based TV manufacturer Vizio announced the LeEco would acquired VIZIO for $2 billion. The combined TV sales of VIZIO (No. 2 in the U.S.) and LeEco (No. 7 in China) would have been sixth in the world in 2015, ahead of Skyworth.
Vizio’s management and customer service teams will remain in place, and the company’s sets have always been made in China, so it’s the global strategies and synergies that are important here. LeEco buys VIZIO’s know-how and sales and distribution infrastructure in the U.S. VIZIO gets access to the Asian (including Chinese) market, where it currently has little exposure.
We’re not done yet. On August 2, Variety reported an upcoming content deal between LeEco and Netflix. “We are planning a very significant cooperation with Netflix,” said Liu Hong, co-founder and vice chairman of LeEco, speaking in Beijing on Tuesday. “Details will be announced in the third quarter.”
A quick look at Le.com shows a large selection of Chinese-language films and videos. How does Netflix content fit in there? It could, of course, with dubbing or subtitles, and a period for approval from Chinese censors (which is becoming a lengthier and more thorough process). But China may not be where LeEco intends to go with the Netflix content. The company intends to come here.
LeEco will officially announce its new U.S. presence this autumn. PR director Todd Witkemper said LeEco has about 400 U.S.-based employees now and intends to have a thousand by year’s end, reported Jimmy Westenberg in a June 17 posting on Android Authority. The company will reportedly introduce a video streaming service and very competitively priced smartphones to the U.S.
LeEco is also rolling out its phones and a video streaming service in India. Variety speculates that a LeEco/Netflix deal might also be done for the Indian market.
So, are we likely to see free VIZIO sets being used as inducements to sign up for LeEco’s new U.S. streaming service? If LeEco attempts their free-device strategy in the U.S., I would guess using their own smartphones is more likely. We’ll see.
Posted by Ken Werner, September 30, 2016 11:15 AM
About Ken WernerKenneth I. Werner is the founder and Principal of Nutmeg Consultants, which specializes in the display industry, display technology, display manufacturing, and display applications. He serves as Marketing Consultant for Tannas Electronic Displays (Orange, California) and Senior Analyst for Insight Media. He is a founding co-editor of and regular contributor to Display Daily, and is a regular contributor to HDTVexpert.com and HDTV Magazine. He was the Editor of Information Display Magazine from 1987 to 2005.