LeEco is coming to the U.S.
The company, which is known as the “Netflix of China” for a streaming business that actually pre-dates the U.S. SVOD giant, said it’s going to launch smart phones, smart TVs and a streaming service in the U.S. by the end of the year.
LeEco (pronounced LAY-EEco) is well known in China for making everything from phones to bikes to cameras. It even built a prototype of an electric car. Outside of its $2 billion purchase of TV maker Vizio over the summer, the company is not as recognizable in America.
That’s about to change, with LeEco about to clash head-on with Apple and Samsung in the U.S. smartphone arena, as well as against established titans like Netflix and Amazon in video streaming.
Daniel Matte, an analyst at research firm Canalys, told the Wall Street Journal that there isn't western company that is a direct comparison to LeEco. “They have to be understood in their own light,” Matte said. “It’s extremely ambitious to launch so soon in the U.S., but they are very committed to it.”
LeEco chief executive Jia Yeuting said the company will initially deploy around 100,000 smartphones in the U.S., selling devices with 64 GB of storage and 5.5-inch screens for $399, with an initial rebate of $100.
“Apple and Samsung products have come with a very high premium,” Jia said. “But for our hardware, we sell them at cost level. We profit from all the services that come afterwards.”
One of those services is programming service EcoPass, which will be provided to Le Pro3 phone purchasers free for the first three months. The service features programming from MGM, Lionsgate, VICE and Showtime bundled into it.
The company hopes to deploy a similar add-on programming service strategies with its smart TV imports, which will top out at $4,999 for an 85-inch set.
Cliff Maldonado, principal analyst at BayStreet research, told WSJ that LeEco’s phone is attractively priced, but there is little to differentiate them from rivals. As for the EcoPass bundle, he said even a price advantage couldn’t make up for its programming limitations.
And if all of this weren’t ambitious enough, LeEco is also challenging Amazon in the area of e-commerce, bringing its LeMall to the U.S, too.
Odds of success? Probably long.
“There’s no clamoring for another ecosystem in the U.S. right now,” Jan Dawson, chief analyst at Jackdaw Research, told Wired. “People don’t want something completely new or different—they want the stuff they have to get better.”