Zhou Hongyi was stabbed in the back? What is LeEco's intention in acquiring a stake in Coolpad?

On the evening of June 28, Coolpad Group issued an announcement stating that the company's board of directors was informed by the controlling shareholder Data Dreamland that Data Dreamland sold 18% of its shares to Leview Mobile HK Limited, a subsidiary of LeTV.

The announcement shows that Data Dreamland agreed to sell and the buyer agreed to purchase 780,380,000 shares (accounting for 18.0% of the company's issued share capital) at a price of HK$3.508 per share. After the completion of the agreement, Data Dreamland's shareholding in Coolpad Group will be reduced to 881,960,000 shares (accounting for 20.3% of the issued share capital), and Data Dreamland will no longer be the controlling shareholder.

According to the information, the seller of Data Dreamland is Leview Mobile HK Limited, which is registered in Hong Kong and is a subsidiary of LeTV.

At about 2 a.m. on the 28th, Zhou Hongyi, who had just announced Qihoo's management team, posted a message on WeChat Moments: "Whoever stabs me in the back and tries to screw me, my principle is to fuck him back."

LeEco and Xiaomi were engaged in a heated argument some time ago, and now LeEco has suddenly invested in Coolpad. What does Jia want to do? Why did Zhou Hongyi react so strongly?

1. What does LeTV want?

LeTV has been engaged in a fierce war of words with Xiaomi recently. The cause was that Xiaomi used LeTV as a target when discussing content, saying that its own content had surpassed LeTV's, which LeTV could not tolerate.

In the war of words, Liu Shuwei even wrote a post directly criticizing LeEco's financial report, saying it was very opaque and had meager profits. LeEco's current revenue depends on the fees for its content, and content needs a carrier.

In her research on LeEco, Liu Shuwei directly pointed out that its TV carrier was losing money. LeEco Zhixin Electronic Technology (Tianjin) Co., Ltd., a subsidiary of LeEco in which LeEco holds a 58.55% stake, achieved operating income of 4.1 billion yuan in 2014 and an operating loss of 500 million yuan.

As a carrier, the sales volume of TV is too low to compete with the number of smartphones. The unit price of TV is too high, and the subsidies are too high and the money is burned too quickly. LeTV cannot continue to subsidize like this for a long time. Therefore, LeTV wants to make smartphones. From the current perspective, LeTV's smartphone momentum is not bad.

But the problem is that LeEco is a newcomer in the mobile phone industry. From design to supply chain to production capacity, it needs to slowly accumulate experience. In 2015, when the Chinese smartphone market was in fierce competition, the market did not give LeEco that much time. In this case, LeEco needed to find a mobile phone manufacturer with large volume to quickly roll out its content carriers.

In terms of quantity, Huawei, Xiaomi, Lenovo, Coolpad, TCL... Huawei is not very interested in cooperating with Internet companies. 360 and Huawei have cooperated before, but the cooperation ended in failure. Xiaomi is a competitor, Lenovo has just changed its leader and reorganized, and Coolpad has a cooperation with 360, so it seems that there is no good partner.

However, LeTV took a roundabout way to save the situation. It acquired 18% of the shares at a low price through Data Dreamland and completed its investment in Coolpad.

Currently, Coolpad has three brands. Coolpad is responsible for operators and overseas markets, Dashen is handed over to Zhou Hongyi, and ivvi is responsible for the public market. LeTV has invested in Coolpad. In theory, these three brands can join LeTV's services and make profits for LeTV. LeTV got what it wanted.

In addition, Coolpad's experience in mobile phones can also help LeTV a lot. Like Zhou Hongyi, Mr. Jia also knows Coolpad's position in the industry.

Although Coolpad is not well-known, it has a long history. It has already started making smartphones when Lei Jun was still obsessed with mobile phones and Huawei was still making PHS. When Huang Zhang couldn't handle WinCE, it easily came up with a think tank system based on WinCE and used titanium alloy to make mobile phones early on. In terms of technology, Coolpad can be regarded as the ancestor of LeTV mobile phones.

However, whether or not we can get the technology, market, channels, after-sales service, etc. depends on the results of the subsequent talks. LeEco's subsidiary invested in Coolpad, but it does not mean that LeEco mobile phones can get these things. If LeEco wants to use Coolpad's channels and after-sales service, it may have to pay a little. After all, LeEco mobile phones are also mobile phones, which are in direct competition with Coolpad mobile phones.

Therefore, LeTV's main gains are still in the terminal distribution channels.

2. Why did Zhou Hongyi feel unhappy?

For Zhou Hongyi, he spent real money to establish Qihoo because he wanted to combine software and hardware with Coolpad.

We have mentioned before the hardware strength of Coolpad. Zhou Hongyi found Coolpad, established the Qiku brand, and operated Dashen, which can compete with Xiaomi. A few days ago, the price of Dashen F1 Plus was reduced by 399 yuan, which hit the waistline of Redmi 2A. Redmi 2A is in the hot selling period, and Dashen F1 Plus is in the clearance period. The low price makes Lei Jun unhappy, which is what Zhou Hongyi likes.

However, when Zhou Hongyi was ambitious, a fire broke out in his backyard. Coolpad brought in LeTV, which actually formed a competitive relationship with Zhou Hongyi. Although LeTV's content is somewhat different from 360, the purpose of both is to collect added value from users through mobile phones.

Moreover, if users buy a LeTV phone, they will no longer buy 360's Qiku phone. It just so happens that Qiku's positioning overlaps with LeTV, while LeTV has no conflict with the cheaper Dasheng. How could Zhou Hongyi not be annoyed?

Zhou Hongyi spent billions to attract a partner, but suddenly he became a partner of his competitor. Who should he listen to when marrying two men? So Zhou Hongyi expressed his strong dissatisfaction in a WeChat Moments post.

3. Interests can be coordinated, but practices are difficult to harmonize

In fact, both 360 and LeTV are looking for carriers for their content and services by making mobile phones. There is a competitive relationship between the two companies, but it is not very direct.

A mobile phone can be equipped with 360 and LeTV services at the same time, there is no conflict. The conflict now is mainly between LeTV phones and the phones that Qihoo is going to launch.

From the perspective of interest, this issue can be coordinated. LeTV phones, Qiku phones, Dasheng phones, Coolpad phones, and ivvi phones can all carry the services of both companies, and both sides can get what they want. This is how Alibaba and Meizu compromised. In terms of product positioning, LeTV's own phones can be higher, and there will be no conflict if the positioning of Qiku phones is offset.

However, for Zhou Hongyi, LeEco's sudden attack was a revenge. If this matter had been discussed with 360 in advance, Zhou Hongyi might have compromised. But keeping it highly confidential and then making it public made 360 ​​feel like its girlfriend had been stolen.

Therefore, this matter will not be over, and there will be various troubles in the future. Let's prepare to watch the show.

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.