Xingji Technology, a company launched last year by Eric Li, the founder of Geely, has just taken a 79.09% stake in Meizu, a Chinese company that has been around for almost two decades. A first smartphone is expected by 2023.
Will a new Chinese smartphone producer enter the fray with Xiaomi, Oppo, OnePlus, Vivo or even Realme? These manufacturers must keep a close eye on the maneuvers currently being carried out by Eric Li, the founder and boss of Geely, the Chinese car manufacturer which owns the Swedish brand Volvo. And for good reason, Xingji Technology, a company launched last year by Eric Li with the ambition of positioning itself in the high-end smartphone segment, has just taken a 79.09% stake in Meizu, a Chinese company that has almost two decades of existence.
Founded in 2003, Meizu seemed well on its way to becoming a major smartphone manufacturer in China, to the point of being able to compete with Xiaomi and others. But its heyday was short-lived and the brand has since been largely outpaced by the current leaders. Meizu now has a marginal market share in China. But things could well change in the coming years, under the impetus of Xingji Technology, Eric Li’s company. Despite the merger with the latter, Meizu will continue to operate as an independent brand.
The automobile and smartphones are getting closer
The interest of the boss of Geely for smartphones illustrates a growing trend in the automotive industry, while manufacturers are in need of growth drivers due to an uncertain economic climate, against a backdrop of galloping inflation, shortage of semiconductors and war in Ukraine. Earlier this year, Xiaomi announced plans to invest $10 billion in its subsidiary dedicated to the production of electric cars.
The Chinese group, whose activity is essentially based on consumer electronics and particularly on smartphones, with very tight margins, is thus seeking to diversify its sources of income. In-vehicle technology is becoming increasingly important with the expected arrival of self-driving cars. A boon for all manufacturers, like Geely or Apple, which wants to launch an autonomous electric vehicle from 2025, according to Bloomberg.
In this context, Xingji Technology and Meizu wish to create “a multi-device and immersive digital experience”. Xingji Technology plans to market its first terminal by 2023 and sell three million units in the first year, according to Reuters. But the road looks particularly long to compete with Samsung, Apple or Oppo. In addition, growth should not be there this year for the sector, since worldwide smartphone shipments are expected to fall by 3.5% in 2022, according to a study by the firm IDC.