#Asia This Chinese tech giant just sold a million of its new smartphone in 2 hours; but is it sustainable?


LeEco’s new Superphones had received 23 million registrations on LeMall.com and other e-commerce platforms

Le 2Pro (Gold and Silver)

A new heavyweight contender has stepped into the Chinese smartphone ring dominated by Xiaomi, Oppo, Huawei and Oneplus: Chinese tech conglomerate LeEco (previously called LeTV).

Yesterday at 10am, it officially launched sales of its second generation series of Superphones – Le 2, Le Max2 and Le Pro2. By noon, all one million units of the phones were sold, netting LeEco a whopping  RMB1.22 billion (US$188 million) in sales.

Prior to that, LeEco garnered 23 million registrations on LeMall.com and other e-commerce platforms. In fact, upon launch, consumers cleaned out LeMall.com’s Le Max 2 stocks within a minute – or to be precise, 57 seconds.

According to a press statement, the bulk of the sales came from the Le 2 model – all 750,000 units were sold out in 8.26 minutes on LeMall.com, bringing in US$140 million.

The sale also created a new record on JD.com with the biggest sales amount for new products in a single day.

Here is breakdown of the features of the new series:

The flagship model – Le Max2 features a 5.7 inch display with a 2560×1440 pixels resolution. It is powered by a quad-core Qualcomm Snapdragon 820 processor and 4Gb of ram. It also features a 21-megapixel rear camera and a 8-megapxiel front camera, and runs on a 3100mAh non-removable battery.

The mid range model – Le Pro2 features a 5.5 inch display with a 1080p resolution. It is powered by a 2.3GHz MediaTek Helio X20 processor, 4GB of ram, and a 3000mAh non-removable battery. It comes with 32GB of non-expandable internal storage, and is packed with a 21 megapixel rear camera and a 9 megapixel front camera.

The lower end Le 2 is loaded with all of the same components with the exception of a 16 megapixel rear camera and an 8 megapixel front camera.

Also Read: The top Chinese smartphone brand, Huawei, just launched a mobile payment service

All of the LeEco Superphones run on a Android 6.0 Marshmellow operating system and comes with a fingerprint, accelerometer, proximity, and compass sensor.

One quirk about them is the bold decision to ditch the traditional 3.5mm headphone jack for the USB Type-C audio port supported by CDLA (Continual Digital Lossless Audio) technology.

Beyond phones

Founded in 2004 by Jia Yueting and Liu Hong, LeEco is a tech MNC engaged in a myriad of businesses, spanning from Internet-based Super TV and Superphones, video production and distribution, smart devices/accessories and large-screen applications, to e-commerce and even connected super-electric cars.

It also has a sizeable content libraries, comprising of movies, TV dramas, entertainment shows, sports and music.

LeEco went public with a market capitalisation of US$12 million. It is headquartered in Beijing, and has regional headquarters in Hong Kong, Los Angeles and Silicon Valley.

Like Apple and Xiaomi, LeEco has grand plans to build its self-sustaining product ecosystem  – allowing its consumers to use their services across its different offerings, which includes the Superphones and the Super TVs.

Yueting claims LeEco sells its own products below the industry BOM cost (which is the cost of purchasing and assembling the raw materials for products) and “and is forming a brand new concept where users will only pay for the high-quality services and content, rather than the premium of hardware and the brand.”

LeEco has also consistently invested heavily in R&D. In just over a decade, it has accumulated 11,000 patents in the fields of smartphone, TV, automobile, Internet-of-Vehicles (IOV), electric car, eUI, virtual reality (VR).

Just a few days ago, Yueting, a strong proponent of  innovation, lambasted Apple for falling behind in creating disruptive products, calling  its new iPhone SE, calling it an “outdated” offering.

Yueting said LeEco is prioritising the product ecosystem over software and hardware, which it is hopes will foster a more dynamic R&D environment.

Also Read: Global smartphone sales may have peaked, growth to drop to single digits in 2016

By adopting on a strategy of fast-paced no-holds-barred R&D, LeEco may be betting on being  constantly two steps ahead of the competition – or keeping consumers in its own product ecosystem, to capture the lion’s share of the market; but is this a sustainable strategy?

While certainly not unorthodox  — and certainly mirrors Apple’s longstanding game plan to keep customers in a closed ecosystem — accelerating and keeping up the momentum of groundbreaking product development — or specifically, in this case, the product ecosystem development  — could alienate consumers. Which is, a R&D environment where innovation is priced over consumers’ needs.

It is still, ultimately, imperative to keep in mind that the average consumer is a layman, not a tech hobbyist. Most people are fine without flashy features and/or a whole array of accessories and products to augment their smartphone.

However, if LeEco is betting on a strategy easing everyday consumer needs by streamlining — including cashless payments, citizen ID, tickets, control of other smart products — all on one phone, it could pay off huge dividends and pose a formidable challenge to the incumbents.

Still, it would be a path that LeEco would have to tread carefully and not jump on every trend without first ensuring the security of its ecosystem.



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