LeEco becomes Coolpad’s largest shareholder and expects to sell 100 million phones in 2017

LeEco is one of China's most popular mobile brands although it just broke into the market a year ago. By this April, LeEco had sold more than 10 million smartphones.

Updated: October 14, 2016 4:34 pm
LeEco, LeEco CoolPad merger, LeEco CoolPad shares, LeEco shareholder Coolpad, Coolpad bought by LeEco, technology, technology news, LeEco, Coolpad, LeEco Coolpad, Data Dreamland, St. Petersburg International Economic Forum, news, sponsored, sponsored news, latest news, Chinese smartphone, India news, Express news LeEco is now Coolpad’a largest shareholder after purchasing 11% of Coolpad’s shares.

LeEco has become Coolpad’s largest shareholder after it purchased another 11% of the latter’s shares, according to a deal announcement on June 17. LeEco bought the 11% Coolpad shares from Data Dreamland, the former largest shareholder of Coolpad, with 1.047 billion HKD (US$135 million). After the transaction, LeEco holds a total 28.9% of Coolpad’s shares and becomes the largest shareholder of China’s top four domestic mobile brand. On the same day, Mr. Jia Yueting, founder and owner of LeEco also confirmed the deal at a speech at Russia’s St. Petersburg International Economic Forum.

Before the deal, LeEco was Coolpad’s 2 largest shareholder after it invested 2.74billion HKD (US$353 million) in buying 18% of the latter’s shares last June 28.

The integration is looking to become the strongest Chinese smartphone league, and will also allow LeEco to have a stronger voice and influence in the smartphone industry. In terms of league sales, a conservative estimate is 50 million to 60 million units of smartphones in 2016, and more than 100 million phones in 2017, making LeEco one of the biggest smart phone company in the world.

The integration will help Coolpad’s products to align with LeEco’s ecosystem model, which is “platform + content + terminal + application”. Coolpad used to China’s 2 largest mobile phone brand, dominating China’s 3G and 4G market together with Samsung.

LeEco is one of China’s most popular mobile brands although it just broke into the market a year ago. By this April, LeEco had sold more than 10 million smartphones, and its second quarter single month sales has exceeded 2 million units, and the number is expected to be over 3 million in the 3 quarter.

LeEco as Coolpad’s largest shareholder will not only benefit from added product research, patents, marketing and after-sales capabilities, but also allow the companies to strengthen its respective brands and change the mapping of global smartphone industry.

On the strategic level, the support of Coolpad’s smartphone resources will bring valuable advancement to LeEco’s Superphones. The strategic stake will allow the ecosystem model to integrate with Coolpad’s near-billion intelligent terminals within a very short time.

From an R&D standpoint, Coolpad has a 3000-strong team, with over 7000 patents including more than 500 patents overseas, and has already established 7 major R&D centers around the world, which will greatly strength LeEco’s R&D capabilities and speeds up the globalization of LeEco.

LeEco will also benefit from Coolpad’s strong sales channels. Besides more than 500 direct offline stores in China, Coolpad also has strong sales in North America, Europe, Asia and Africa. Before the stock deal, Coolpad’s 2016 global sales target was 30 billion yuan (US$4.6 billion), in which 70% from China and 30% from overseas, and the company predicted its overseas market sale will increase 100% year over year within the next 3-5 years, making its overseas sales equivalent to its China sales.

Also worth noting is that LeEco, as Coolpad’s largest shareholder, will enjoy the advantage of ingraining its ecosystem model into Coolpad’s near-billion smart devices, with access to its smartphone users, 50% of whom could be converted to LeEco’s ecosystem-based users, further enhancing LeEco’s stance in the mobile Internet industry.

Disclaimer: This article is sponsored by LeEco

Disclaimer: This article is sponsored by LeEco

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