New phone emerges from Jobs' shadow

Chinese manufacturer says it is ready to take on the world

He stood there looking for all the world like Steve Jobs - garbed in black T-shirt, blue jeans and holding his company's latest gadget.

In Jia Yueting's sales pitch, too, there were echoes of Jobs at an "Apple event" in California in years gone by.

Jia Yueting, founder of LeTV Holdings, unveils three kinds of handsets - Le One, Le One Pro and Le Max - in Beijing. Provided to China Daily

"These phones are breathtakingly beautiful," Jia told his Beijing audience. "They are breathtakingly fast, and you're going to love the screen experience they give you."

Jia, founder of LeTV Holdings, also has a passion to innovate, and yet he says he does not want to forever live in the shadow of the Apple co-founder or that company's products.

"Some smartphones, such as iPhone, have already seen their best days," the billionaire entrepreneur says. "They are going out of fashion."

On the other hand, Jia's nonchalance is no doubt tempered by the fact that if he wants the cellphones his company has just begun to market to be the top seller in China, it is Apple that he must knock off the top perch.

A few weeks ago, the exhibition area for LeTV, primarily known for its online video-streaming service, was one of the most popular for visitors to the Global Mobile Internet Conference in Beijing, as people jostled to try its three handsets.

Jia says his company is not just making a smartphone, but is "creating a new Internet-based ecosystem that even Apple will envy".

LeTV, whose headquarters are in Beijing, unveiled three kinds of handsets at the Beijing event on April 14: Le One, Le One Pro and Le Max.

Apart from the iPhone, LeTV's biggest phone rival is Mi Note, made by another Chinese company, Xiaomi Corp.

Jia, now 42, set up LeTV in 2004, after quitting his job as a public servant with a local taxation bureau. He says it was the world's first publicly listed video-streaming service, going on the growth enterprise board in 2010.

Using a low-price strategy, LeTV overtook Lenovo in smart TV sales in China in 2013.

Not content with entering the smartphone market, the company says it will also put an electric car on the market soon to rival that of Tesla Motors. LeTV's car is being developed in the United States and will probably be made in China, the company says.

As for the new phones, Jia says that with features comparable to or better than those of the iPhone, but costing less, they will be able to lure potential buyers away from LeTV's American rival.

LeTV's smartphones retail for less than 3,000 yuan ($485; 445 euros), which Jia says is about 500 yuan less than for devices with similar features.

Le Superphone is the world's first smartphone that provides video zooming during conversation, he says.

"It allows real-time zooming ... when you watch a video on your phone, normally you cannot zoom in or zoom out. The iPhone cannot do that.

"When you watch a football match and a player kicks the ball, you do not know whether it has gone into the goal or not. With our phone you can zoom in and see whether a goal has been scored.

"It will be a great feature for live streaming of sports event."

Like many of his Chinese peers, such as Xiaomi Corp, Jia has plans to take his brand outside China.

"Our smartphones will go onto the Indian market this year," he says.

Handsets were to be available for delivery there by mid-May.

LeTV's smartphones will go on sale in the US this year, Jia says, and the company plans to offer Internet TV and video-streaming services in the US later this year.

Screen sizes of the new phones are on par with or larger than the 5.5-inch (14 cm) screen of the iPhone 6 Plus.

Feng Xing, the company's senior vice-president, says a few million phones will be shipped this year, and more than 10 million will be shipped next year.

Yan Zhanmeng, an analyst in cellphone market research for IDC China, says if Chinese companies are to catch up with and overtake their foreign rivals, innovation is the key.

"Companies such as LeTV are very innovative when it comes to the way they operate, but they are not particularly innovative with the devices they are marketing.

"Non-traditional smartphone makers such as LeTV that have other businesses can draw on these as they develop their smartphone business. For instance, LeTV has a strong customer base in the TV industry, and if the two are combined they can grow together."

LeTV is also using a new sales model by giving away phones to its long-term video content subscribers. The subscribers are asked to buy multi-year video-streaming services for the company's video portal.

Another challenge for LeTV is financing. To pay for its expansion and diversify its product range it needs capital.

Jia had planned to sell company shares worth more than 10 billion yuan, but that triggered a panic among investors that led to a price dip on the board of listed startups.

LeTV is strapped for cash on multiple fronts, including for making films, smartphones and electric cars and sports broadcasting. Jia will lend the cash-outs to LeTV interest-free for five years to ease the liquidity problem.

Zhu Dalin, a researcher at Analysys International, says LeTV is in need of strong financial support because of the ambitious ecosystem it plans to compete with rivals such as Xiaomi Corp.

"A bigger ecosystem will give LeTV an edge," Zhu says.

LeTV is trying to leverage its online content resources to sell hardware such as Internet TVs and smartphones, on which users can watch videos free of charge.

It is facing stiff competition from Xiaomi, which also sells TVs that can play online videos and download applications.

But Jia exudes confidence about LeTV's future.

"Over the next 10 years Chinese Internet electronics companies will beat the foreign brands. It's time consumers were given greater and better choice."

Contact the writers at huhaiyan@chinadaily.com.cn and gaoyuan@chinadaily.com.cn

(China Daily Africa Weekly 07/10/2015 page8)