Earlier this week, TV-maker Vizio announced that it had been acquired by the Chinese company LeEco. “Who?” you might have said. Even people in China would have said the same thing until a few years ago, but now the company is a conglomerate that sells streaming video and smartphones, and electric cars.
If that seems like a random selection of businesses, it’s not. Once we have fully autonomous vehicles, what are you going to do on road trips instead of driving? Most people would probably watch TV or movies by themselves or with passengers. Who would put TV and movies in those millions of cars?
The Verge, which has followed the company’s product releases in recent years, explains that LeEco’s name is the result of a “global branding exercise” a few years ago: the name of their flagship product, Letv, means “happy TV” in Chinese, and what the company plans to sell are integrated content and product ecosystems.
If you follow technology news, you may remember an incident where the company’s founder and CEO posted on Weibo, a Chinese microblogging site that’s kind of like Twitter, if no one on Twitter were allowed to speak out against the Chinese government. Founder and CEO Jia Yueting compared Apple to Hitler, which didn’t go over well in Western countries.
The point that Jia was trying to make was about platform types, since the first LeEco smartphone running Android was about to hit the market. Apple has its own ecosystem for users, too, but it’s closed.
Meanwhile, the company had a choice: it could spend money to get into the TV market in the Americas on its own, or acquire a current prominent brand. “We could have chosen to use the $2 billion to enter the market organically,” the company’s SVP explained to The Verge.
The company then plans to bring its content and software ecosystem to Vizio’s TVs, since it’s already established as a respected brand here. The part of Vizio’s business that performs analytics on what customers watch will be spun off into a separate company… and LeEco will be their first client.
What is LeEco, and why is it buying Vizio? [The Verge]
by Laura Northrup via Consumerist
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