If LeEco had any sense, it should have said NO to the acquisition of Hammer

After LeEco became the largest shareholder of Coolpad, there were rumors that LeEco might acquire Smartisan. Although Luo Yonghao, the founder of Smartisan, denied it on Weibo, the credibility of his denial was still questioned by the industry given that he has appeared frequently at LeEco-related events recently. So will LeEco really acquire Smartisan?

The industry knows that from LeEco itself and its holding company Coolpad, its core purpose is to increase the sales of mobile phones to a level that is not marginalized in the short term. According to LeEco's own mobile phone shipments expected to be 20 million this year, it is definitely in the marginalized quadrant. So after holding Coolpad, plus Coolpad's expected 30 million this year, although the annual shipments of 50 million units cannot be considered to have firmly entered the first camp, it has at least escaped the fate of being marginalized. However, there is a question here. Holding does not mean mergers and acquisitions, so how should the shipments of Coolpad mobile phones be calculated? Perhaps in the future, LeEco will have to acquire Coolpad in its entirety. If the full acquisition of Coolpad in the future still has a certain boosting effect and value on the overall sales of LeEco mobile phones, then specifically for Hammer, an annual shipment of at most millions (in fact, last year's shipments were only a few hundred thousand units) What is the ecological value and significance for LeEco? At least in terms of the overall shipments of LeEco's main appeal, there is no substantial value.

As for the mobile phone products themselves, although some industry insiders believe that Hammer phones have certain advantages in design (including craftsmanship) and are worth learning from LeTV phones. We do not deny Luo Yonghao's concept of "natural seriousness" and "craftsman spirit" in making products, but in today's mobile phone industry, which has been scaled and industrialized, the small workshop-style closed-door production and slow work have no place to survive. Moreover, in terms of design alone, even Apple's iPhone, which is famous for its industrial design, has difficulty in bringing forth new ideas in design, let alone the small workshop-style Hammer phone. In fact, looking at today's smartphones, let alone compared with Apple's iPhone, even compared with domestic Huawei, OPPO, vivo, etc., the design of Hammer phones is difficult to show the advantages of Hammer phones in design. What's worse is that the blind pursuit of design has caused the yield rate and production capacity of Hammer phones to encounter bottlenecks (it is said that the yield rate of Hammer phones in the early stage was only about 20%), which has led to the fact that design has not become a plus point in the competition of Hammer phones, but has become the biggest obstacle to the advancement of Hammer phones.

Some people may say that Hammer phones still have a certain brand awareness in the industry, and there are even loyal "Hammer fans", but the actual situation is that according to the "China Mobile Phone Brand Reputation Research Report" released by the China Statistical Information Service Center, Xinhuanet, and China Quality News Network in the third quarter of last year, among the 22 active brands, Hammer phones ranked third from the bottom. And the "Hammer fans" sued Hammer phones for commercial fraud this year, no matter what the result is, it is bound to have an adverse negative impact on the reputation of Hammer phones. As for fans, we think this is actually a false proposition, especially in today's world where smartphones are difficult to differentiate, updated frequently and with diverse choices, there are no so-called loyal users who can wait for a certain manufacturer or brand of mobile phone. In fact, here, we have seen that the so-called Hammer phone is at best a higher level of "marketing" (such as sentiment), and its product itself has no substantial market competitiveness. And with the acquisition, Luo Yonghao's "born proud" "sentiment" has actually passed away. In other words, even from the perspective of "sentiment", it is difficult for LeTV to find the selling point of the market for Hammer phones and the reason for LeTV's acquisition.

If the above is that LeEco's acquisition of Hammer Mobile Phone cannot bring any value to itself, once LeEco acquires Hammer Mobile Phone, the negative effects may appear. For example, Luo Yonghao has already pledged part of his equity to Alibaba. If an acquisition is launched, LeEco will inevitably face a trivial equity battle, similar to 360's investment in Coolpad. Again, if the acquisition object can bring value, it is worth fighting for. If there is no value, why bother to cause trouble. Secondly, after the acquisition of Hammer Mobile Phone, let's not talk about whether the multiple brands formed by LeEco's mobile phone business will overlap in market competition, just what is the importance of LeEco's mobile phone business? After all, from the current point of view, the various brands of LeEco's mobile phone business are all in charge of so-called big-name figures, such as Feng Xing, who is in charge of LeEco mobile phones, and Liu Jiangfeng, who has just been appointed as the CEO of Coolpad. If Luo Yonghao, who is "born proud", is added, how can LeEco balance (such as the resources invested, the degree of attention, etc.) the mobile phone brands that these three are responsible for? It is worth mentioning that Lenovo's previous failure in the operation of multiple brands of mobile phones is still vivid.

To sum up, we believe that given that the Hammer phone currently has no substantial boost to LeTV's overall mobile phone strategy in terms of its brand, product itself, and even the "sentiment" that supports its foothold in the market, coupled with the internal competition and risks that may arise from multi-brand operations after the merger and acquisition, if LeTV is wise, it should not go for mergers and acquisitions.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.