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Analysts have questions on LeEco US plan

By Paul Welitzkin in New York | China Daily USA | Updated: 2016-10-21 11:40

When LeEco enters the US mobile phone market, the Chinese technology company will encounter a competitive landscape with a questionable sales strategy, analysts said.

LeEco launched several new products in a flashy American debut in San Francisco on Wednesday, including its LePro3 smartphone with 64 GB of storage and a 5.5 inch screen with a starting price of $399 and a rebate of $100.

Jan Dawson, chief analyst at Jackdaw Research, said the price is competitive relative to other premium smartphones in the US that tend to retail at $650 or more.

"However, those phones are typically sold through carriers on either a subsidized basis or an installment plan, both of which make the upfront cost far less," Dawson wrote in an email. "Given that LeEco will be selling only online through its own channel, its phones are never even going to be seen by the vast majority of consumers, who tend to buy in physical retail through either the carriers or sellers like Best Buy."

The Le Pro3 pricing is competitive, but not outstandingly cheap, said Neil Mawston of Strategy Analytics.

"The BLU Energy XL with a 6-inch screen currently retails around US$299 at T Mobile and elsewhere in the US. Although the price is compelling on paper, there are lots of other reasons to believe they'll struggle to sell these phones," Mawston said in an email.

In terms of pricing and specifications, the Le Pro3 stacks up well, said Avi Greengart, who covers consumer products for Current Analysis. "In terms of sales and distribution, that will be a challenge. Few US consumers buy phones in this price range. Few US consumers buy unlocked phones online. No US consumers have ever heard of LeEco," he added.

"We've definitely seen some flare-ups in the past in Congress and in other government circles about Chinese technology vendors in the US, but I don't foresee any immediate issues for LeEco here, especially while they're so marginal in the US market," said Dawson.

LeEco also unveiled its self-driving electric vehicle on Wednesday.

The company said it combines "sophisticated design" and "high-performance handling" with features such as intelligent inductive charging and machine-learning of facial, emotion, system and path recognition.

But LeEco did not disclose a price or say when it will hit the market. Founded in 2004, LeEco started as a video-streaming service provider similar to US-based Netflix Inc but since has expanded into smartphones, televisions and a driverless car.



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