Tag Archives: Coolpad

SMARTPHONES: Struggling Coolpad Sees Money Bags in Xiaomi

By on

Bottom line: Xiaomi is likely to quietly settle a copyright infringement lawsuit against it by Coolpad, which is opportunistically looking for some hush money before Xiaomi’s IPO and can’t afford a long drawn-out court battle.

Coolpad sues Xiaomi as latter’s IPO draws near

In a move that smells of desperation, down-and-out smartphone maker Coolpad (HKEx: 2369) has filed a lawsuit against the up-and-coming Xiaomi. Anyone with half a brain will know the timing of this lawsuit looks quite suspicious, since Xiaomi is getting ready to make what could be this year’s biggest IPO in the next month or so, likely to raise up to $20 billion.

It’s quite difficult to know if this particular lawsuit has any merit, though we do know that Coolpad was an early hot player in the smartphone space and thus may legitimately hold some intellectual property similar to things that Xiaomi is now using. But the fact of the matter is that Coolpad can hardly afford to wage a long and potentially costly legal battle. Instead, it is probably hoping for a quick settlement to give it some much-needed cash to continue funding its money-losing daily operations. Read Full Post…

SMARTPHONES: LeEco Sells Down Coolpad Stake

By on

Bottom line: LeEco’s sell-down of its Coolpad stake is a prelude to disposal of the remainder, and could presage a sale of Coolpad to another smartphone maker later this year.

LeEco sells down Coolpad stake

The unraveling of former online video superstar LeEco (Shenzhen: 300104) continues as we head into the new week, with word the company has sold off a significant chunk of its stake in struggling smartphone maker Coolpad (HKEx: 2369) for a fraction of what it paid. This particular news is significant for a number of reasons, only one of which involves the latest attempt to salvage LeEco. It also has large implications for the future survival of Coolpad, and China’s broader smartphone industry. Some have predicted 2018 will be the year this overcrowded industry finally sees a weed-out that is long overdue.

I and many others have predicted this particular sale for a while, so the actual news doesn’t come as a huge surprise. LeEco purchased about 30 percent of Coolpad in two tranches for a combined $500 million in 2015 and 2016, when it was at the height of its meteoric rise. Coolpad had a relatively sound name at that time, though it was already feeling the effects of intense competition in China’s smartphone space. Fast forward to the present, when the future of both companies is in serious doubt, as each loses big money and struggles under major debt piles. Read Full Post…

SMARTPHONES: Coolpad Finds New Suitor, as LeEco Retreats

By on

Bottom line: LeEco is likely to sell its stake in Coolpad in the next six months, and new investor Centralcon could emerge as the buyer with a goal of trying to turn the company around.

Coolpad finds new suitor

A potential white knight has stepped forward to provide some funds for struggling smartphone maker Coolpad (HKEx: 2369), in a fresh sign that controlling stakeholder LeEco (Shenzhen: 300104) may be preparing to dump the company as part of its protracted reorganization. The amount of the fund-raising is relatively small at HK$582 million ($75 million), though it could be enough to help Coolpad figure out what it wants to do next.

The more interesting question is whether this signals that LeEco is planning to dump Coolpad and the smartphone business in general, which I’ve been predicting for a while since the ousting of LeEco founder Jia Yueting from the company in July. Smartphones was one of the many businesses that Jia entered at the height of his expansion euphoria, and seems like a likely candidate to be jettisoned as the company’s new managers try to right this foundering ship. Read Full Post…

SMARTPHONES: Smartisan Gets New Funding, But From Where?

By on

Bottom line: Smartisan’s new funding and plans to produce 5-6 smartphones a year look like an anomaly in the highly competitive market, and it’s unlikely to survive as a standalone entity over the next 5 years.

Smartisan gets new funding

I was a bit surprised to read that a clear second-tier smartphone player, the uppity Smartisan, has received 100 million yuan ($147 million) in new funding, as we begin the latest week of summer. I haven’t seen this company’s name or many second-tier players like OnePlus in more than half a year, though their collective names have come up quite a bit in the bigger smartphone numbers.

That’s a reference to the “other” category in the quarterly smartphone figures put out by data tracking firms like IDC, which show that this collective group that includes all names lumped together after the top 5 is rapidly losing share. In IDC’s latest China market data that came out last week, the top 5 vendors, Huawei, Oppo, Vivo, Xiaomi and Apple (Nasdaq: AAPL), collectively controlled 73 percent of the market. “Others”, including the likes of Smartisan, had to divvy up the remaining 26.9 percent. But what was most notably was that 26.9 percent marked a sharp decline from last year, when this group controlled 36.2 percent. Read Full Post…

VIDEO: LeEco Moves on With Founder Jia’s Resignation

By on

Bottom line: LeEco is likely to spin off its new energy car unit by the end of the year following the departure of founder Jia Yueting from the listed company, while it could also close its smartphone division.

LeEco set to spin off car unit?

In what looks like a major turning point for the foundering LeEco (Shenzhen: 300104), the company’s charismatic but embattled founder has relinquished his role as chairman at the publicly listed firm. This particular news came out just as people were leaving home for work last night, so it’s still not completely clear on what exactly has happened.

But it appears that one of the companies that had agreed to provide a major cash infusion, a real estate developer named Sunac (HKEx: 1918) was refusing to hand over the funds because it said certain unspecified conditions weren’t met from its agreement. Thus it appears that Jia’s departure from the listed company, and probably most of LeEco in general, was probably the big sticking point. Read Full Post…

INTERNET: Crisis Grows for LeEco’s Coolpad, Yidao

By on

Bottom line: Ongoing crises being faced by LeEco-backed Yidao and Coolpad are likely to deepen in the month ahead, as each company gets abandoned by its major stakeholder and is forced to grapple with rapidly deteriorating business.

Coolpad releases preliminary 2016 results

Two companies snapped up by former online video superstar LeEco (Shenzhen: 300104) are in the crisis headlines this morning, with smartphone maker Coolpad (HKEx: 2369) and car services operator Yidao both driving rapidly towards financial collapse. The first headline has Coolpad announcing preliminary results for 2016 that look quite alarming, as an ongoing back-and-forth with its auditor adds more worries to its story.

The second story has Yidao promising its increasingly unhappy unpaid drivers they will finally get their money late this month, as it tells the world it’s in the process of raising new funds. And if you believe that one, I have a nice bridge to sell you in Brooklyn. Read Full Post…

SMARTPHONES: Coolpad Losses Balloon, No Help in Sight

By on

Bottom line: Money-losing Coolpad is likely to get sold before the end of this year to raise cash for controlling stakeholder LeEco, or could end up getting shut down if no buyer comes forward.

Coolpad to post big H1 loss

It’s a new week, and that means new chances to write about the struggles of companies in the orbit of fast-fading former video superstar LeEco (Shenzhen: 300104). Last week the company’s majority owned Yidao private car services was in the headlines, amid a he-said-she-said spat over 1.3 billion yuan ($189 million) in funds that Yidao said were “misappropriated” by its parent, leading to its own cash crunch that saw many of its drivers going unpaid.

If that wasn’t bad enough, now another one of LeEco’s assets, smartphone maker Coolpad (HKEx: 2369) is warning of ballooning losses due to plummeting sales in the fiercely competitive market. There are two subtexts here, the most obvious being that LeEco is hardly in any position to throw Coolpad a needed lifeline. The other is that LeEco’s own smartphone business is probably dying a rapid death, since it was theoretically going to use Coolpad to make at least some of its phones. Read Full Post…

INTERNET: Yidao Talks IPO, in Break with LeEco

By on

Bottom line: Yidao’s announcement of plans for an IPO hint at a looming sale of the company by controlling stakeholder LeEco, which could be mulling sales of other recently purchased assets in a bid to ease its cash-crunch.

Yidao prepares for IPO

What do you do when you’re running low on cash? The answer is obvious for private car services firm Yidao: make an IPO. That would normally seem like a relatively smart and logical choice for most up-and-coming companies, but Yidao isn’t quite one of those. For starters, the company operates in an extremely competitive space now dominated by the likes of Didi Chuxing, UCar and Shouqi, just to name a few.

The other big factor weighing on the company is its majority ownership by cash-challenged online video company LeEco (Shenzhen: 300104). To be precise, LeEco paid $700 million for 70 percent of Yidao in 2015, back when both companies were far healthier than they are today. Thus this latest pronouncement that Yidao is even considering an IPO seems to hint that LeEco may be considering a sale of some of the many assets it acquired during a breakneck expansion that got it into its current mess. Read Full Post…

SMARTPHONES: Qihoo Calls Early on 2017 with Smartphone Buy

By on

Bottom line: Qihoo’s latest smartphones foray with its purchase of the obscure Blephone reflects the tenacity of founder Zhou Hongyi, but will quickly end in failure due to a late arrival and intense competition in the space.

Security software maker Qihoo 360 just  doesn’t change its mind when opinionated CEO Zhou Hongyi sets his sights on something. After a somewhat disastrous beginning to Zhou’s foray into smartphones over the last 2 years, he’s loudly proclaiming that 2017 will be the year of the smartphone for his company. And to show he’s serious, Qihoo has just revealed that it paid an “eight-digit” figure for an obscure smartphone maker called Blephone. Read Full Post…

SMARTPHONES: Poor After-Sales Service Haunts LeEco Smartphones

By on

Bottom line: LeEco’s smartphones will have difficulty finding a major audience over the next 2 years due to technical problems and poor after-sales service, making it hard to meet its aggressive targets.

LeEco smartphones face technical issues, poor after-sales service

An investigative report on the year-old smartphone business of online video superstar LeEco (Shenzhen: 300104) is showing how the company’s dreams of quickly becoming a major player in the crowded space might be more difficult than it realizes. Specifically, the report in the respected Yangtse Evening News is spotlighting major shortcomings in LeEco’s after-sales service, a critical link for its smartphones that are facing inevitable technical problems due to their newness.

I’ve been a LeEco smartphone skeptic for a while now, so perhaps some readers may think I’m biased in spotlighting this particular problem that all new companies face when rolling out a major new product. But the reality is that in all my years of using older cellphones and newer smartphones, never once have I owned a model that didn’t have a major problem at least once that required me to take it to a repair shop. Read Full Post…

SMARTPHONES: LeEco Names Coolpad CEO, Eyes China Smartphone Crown

By on

Bottom line: LeEco and Coolpad could see a brief surge in smartphone sales due to strong promotional efforts, but will rapidly fade when consumers realize its models are the same as many other products on the market.

Coolpad gets new CEO

Just a day after the release of new data showing the surging Oppo was close to stealing China’s smartphone crown from a stumbling Huawei, sector newcomer and online video superstar LeEco (Shenzhen: 300104) is talking up new sales targets that imply it believes it can win the title as soon as next year. That’s quite big talk for a company that only entered the smartphone business last year and has never finished among the top 5 vendors for China. But LeEco CEO Jia Yueting has never been afraid of making such bold predictions, following a Chinese tradition that has seen similar big talk come from most of the nation’s other major smartphone makers. Read Full Post…