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With this decision, Geely would become the first among automakers to delve into smartphone production.
Per a memo, it has been revealed that Eric Li, the founder of a Chinese automaker Zhejiang Geely Holding, is looking to diversify its enterprise by stepping into the smartphone business. It aims to sell 3 million units by the time it hits the market in the next few years.
Geely Looking at the Smartphone Market
This came in an announcement that Geely founder Eric Li (Li Shufu) has set up a new company that would focus on developing premium smartphones capable of competing among giants that dominated the global smartphone market.
Information has it that Hubei Xingji Shidai Technology Co Ltd, the new Li company developed for the phone making project, has collaborated with the Wuhan Economic and Technological Development Zone to develop intelligent devices, including smartphones. It would be headquartered in the central city of Wuhan.
Additional information from the memo shows that a significant amount worth 10 billion Yuan (equivalent to $1.55 billion) would be invested in the project. In return, it is aiming for around 10 billion yuan in revenue in the first year. Its ambition is to rake in 150 billion Yuan in revenue within the first 8years, employ thousands of workers, and debut on the global stock market.
In the past, Li had noted his possible future ventures such as flying cars and helicopter taxis. However, the sudden disclosure of intention to join the phone manufacturing business put Geely among giant rivals in the highly competitive sector, which is dominated by brands like Apple, Xiaomi, Samsung, and others.
With this decision, Geely would become the first among automakers to delve into smartphone production. Although, many phone makers are already joining the electric-carmaker markets.
Comment by Will Wong, who specializes in tracking China’s smartphone market at research firm IDC, noted that Geely’s brand recognition would give it an advantage in the market.
Wil Wong added:
“Nevertheless, the focus of Geely’s mobile phone business is likely to be more on strengthening its ambitions for intelligent vehicle development, in which all automakers are seeking a key differentiator to succeed.”
Per Counterpoint Research data, Apple is the market leader for phones valued at over $400, with a market dominance of 57%. Samsung holds 17% of the market share. As for Huawei, its market share declined due to US sanctions, Chinese rivals like Xiaomi, Oppo, and Vivo are moving up.
Li said in a statement that “there is a close connection in technologies within intelligent vehicle cockpits and smartphone software technologies. The major trend in the coming future is to create user ecosystems across borders and provide users with a more convenient, smarter, and seamlessly connected multi-screen experiences.”