LeEco founder and owner Jia Yueting confirmed at Russia’s St. Petersburg International Economic Forum that the company has now become Coolpad’s largest shareholder by investing in another 11% of the shares worth $135 million. LeEco now has 28.7% of Coolpad’s shares.
LeEco sold over 10 million smartphones this April, and its sales exceeded two million units in just one month in the second quarter. The company said that they expect this number to be over three million in the third quarter.
With this integration, LeEco is looking at becoming the strongest Chinese smartphone company. In terms of sales, the company estimates sale of 50 million to 60 million units of smartphones in 2016, and north of 100 million phones in 2017. These figures have the potential to make LeEco the largest smartphone maker in the world.
Within a year of breaking into the market, LeEco has become one of China’s most popular mobile phone brands. Strategically, Coolpad’s smartphone resources could bring some value to the company.
From the Research & Development (R&D) standpoint, Coolpad has a strong team of 3,000 members with over 7,000 patents, out of which more than 500 patents are from overseas. The company has already established seven major R&D centers around the world. This will greatly strengthen LeEco’s speed of globalization.
Coolpad has close to one billion smart devices in the market, and 50% of them could be converted into LeEco’s users. The competition in China in the smartphones market is very stiff and players like OnePlus and Xiaomi have the first mover advantage in the country. LeEco could have faced difficulty in catching up with them, but this investment gives them a sword big enough to fight their way to the top.