Why Chinese language Automotive Big Geely Purchased Struggling Smartphone Maker Meizu

Chinese language billionaire Li Shufu’s Geely has acquired Meizu, certainly one of China’s earliest smartphone makers, in a transfer anticipated to assist the Chinese language automobile big develop automobiles with options which can be linked to the ability of handsets.

Hubei Xingji Shidai Expertise, a subsidiary of Geely, accomplished the buy of a 79% stake in Meizu. Geely, which additionally owns Volvo and a stake in Mercedes-Benz Group, sees the acquisition primarily as a option to take up know-how for contemporary automobiles, analysts say. They notice that Meizu makes use of its homegrown Android working system, Flyme, which is customizable and lets smartphone customers set up non-Android apps.

“By buying the whole lot of Meizu, Geely would have entry to Meizu’s Android-based working system, the Flyme OS, which can assist Geely acquire a front-row seat in key insights on the feasibility of clever and autonomous driving,” says Yang Wang, London-based senior analysis analyst at Counterpoint Analysis.

“It appears to all of the gamers agree that the automobile will turn out to be a extra normal piece of {hardware}, with software program being the bedrock for future vehicles and software program upgrades, experiences and knowledge being the important thing differentiator between manufacturers,” Wang provides.

In one other bid to work with client electronics, Geely fashioned a producing enterprise final yr with Taiwanese assembler Foxconn Expertise.

The Meizu acquisition goes towards a development of big-name builders in client electronics shopping for into electrical automobiles over the previous three years. Sony, for instance, introduced in March it was becoming a member of forces with Honda to develop electrical automobiles. “As soon as a pacesetter in client electronics, Sony has some superior software program and sensor providing in its arsenal which might be used to make a mark within the automotive business,” Counterpoint senior analysis analyst Soumen Mandal stated of Sony’s electrical automobile plans.

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Geely final yr launched the Geometry EX3 electrical automobile, which it known as its most reasonably priced EV launch up to now at $9,200. Its Zeekr electric-car model created final yr could run the Flyme OS, a Geely fan membership web site says.

Meizu could possibly be choices exterior the cellphone area, too. Its handsets commanded lower than 1% of the Chinese language market within the first 4 months of 2022, Wang notes. The corporate, which was based in 2003, reached a China market share of almost 17% in 2017 earlier than falling behind different Chinese language manufacturers. Meizu says it now has 600 stores plus 1,000 workers.

The smartphone developer’s chairman, Shen Ziyu, has been quoted saying his firm and Geely consider they will discover clients by providing differentiated merchandise, notably premium ones.

Smartphones and fashionable automobiles present indicators of working in tandem, says Neil Mawston, government director with market analysis agency Technique Analytics. “Smartphones are a gateway to the long run automobile,” he says. “Smartphones can unlock doorways, begin engines, ship limitless content material to the head-unit, park the automobile and remotely management a battery charger.

“The Geely-Meizu deal could also be a nod to Apple,” Mawston provides. “If Apple launches an iCar sooner or later, it can certainly be built-in with the iPhone, iPad, Watch, and any VR (digital actuality) or AR (augmented actuality) glasses. Geely could possibly be smarter than we notice.”

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