When the low-cost American TV maker Vizio was acquired by a company called LeEco this summer, a common reaction wasn’t shock at the $2 billion buyout price, but a simple question:
Who the heck is LeEco?
It’s a company you’re going to hear a lot more about in the coming days, even if you’re not sure how to pronounce it (it’s "Lay-EEco," short for "Le Ecosystem"). That’s because the Chinese tech giant is about to make its official launch in the US this week, and has quietly been readying what is expected to be a wide range of gadgets aimed at American buyers.
LeEco launched as a web video streaming company called LeTV back in 2004
Beijing-based LeEco actually started as a web video streaming company called LeTV back in 2004, earning it comparisons to Netflix in China. It went public on the Shenzhen Stock exchange in 2010, and renamed itself LeEco within the past year.
In terms of its hardware products, LeEco makes… everything. Well, not everything — smartwatches and other wrist-wearables are conspicuously missing from the list — but it makes and sells connected TVs, smartphones (called "Le Super Phones"), electric bicycles, dash cameras, headphones, VR headsets, and more. All of LeEco’s products operate on Google’s Android OS, and tend to be priced in the mid-to-low range. It’s expected that some, if not most, of these products will be available in the US in the coming months; LeEco has been making a push into India, as well.
Research firm Strategy Analytics predicts that LeEco will ship 25 million smartphones worldwide in 2016, which, if accurate, would make it the world's fastest-growing major smartphone vendor.
The company has also has made major investments in autonomous cars, both directly and peripherally: LeEco founder and chairman Jia Yueting has backed Faraday Future, the secretive startup taking aim at Tesla, and earlier this year the company unveiled its own, separate electric car concept called LeSee. According to a report in the Los Angeles Times, LeEco also holds a 70 percent stake in Chinese car-hailing company Yidao Yongche.
Where things get murky is around money, as they often do. It’s unclear exactly what LeEco’s financial relationship is with companies like Faraday Future; LeEco told The Verge in a recent interview that Faraday is "not owned by us or part of the corporate structure," but that Jia Yueting is a "significant investor in the company." The Wall Street Journal has reported that Jia has pledged around 70 percent of his shares in LeEco as collateral for loans, which he has, in turn, invested in various business lines throughout LeEco. If there’s anything we know, it’s that the 48-year-old Jia, who often wears Jobsian blue jeans and black shirts, is certainly ambitious.
LeEco makes everything from "Le Super Phones" to smart TVs to autonomous cars
LeEco has already been staffing up in Silicon Valley ahead of its anticipated US launch. The company purchased a 48.6-acre office complex in Santa Clara, California earlier this year (previously owned by Yahoo), and just announced plans to hire 12,000 people in the Bay Area. Right now, LeEco has around 500 employees in San Jose. That puts LeEco right in the heart of Silicon Valley, about a dozen miles down the road from the same video streaming company LeEco was compared to in its early days.
The tech giant hopes to infiltrate Hollywood, too. Last month LeEco "acquihired" Adam Goodman, the former president of Paramount Film Group. Goodman was brought in to steer the US original content business for LeVision, which is LeEco’s entertainment arm.
Can LeeCo gain a foothold in the US?
Based on the little we know about LeEco’s plans for the US market, the comparison to Netflix seems less apt than a comparison to another Chinese company, Xiaomi, which sells everything from smartphones to hoverboards to air purifiers. Or it may be more like Amazon, which in recent years has ramped up shipping of low-cost gadgets in an attempt to get people to buy more stuff — including media content — through Amazon’s web services.
Or, LeEco may chart a similar path to Huawei’s: it may try to sell its products, specifically its phones, at a higher premium, but could have a tough time gaining a foothold in the US, either because of a lack of support from wireless carriers or a lack of brand recognition and trust. And it remains to be seen whether LeEco can successfully leverage Vizio’s retail partnerships to sell its own products in places such as Walmart and Best Buy.
LeEco plans to live stream its US launch at an event Wednesday morning at 10AM in San Francisco; stay tuned to The Verge for updates throughout the event.