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A subsidiary of Zhejiang Geely Holding Group has acquired Meizu, the Alibaba Group Holding-backed smartphone maker, as part of the carmaker's efforts to bolster its connected ecosystem, as rivals race to build new digital platforms for vehicles.
Hubei Xingji Shidai Technology, a venture launched by Geely founder Li Shufu last September to make premium smartphones and other connected devices, bought a 79.09 per cent stake in Meizu, taking control of the Zhuhai-based brand, according to a document released by the State Administration for Market Regulation (SAMR) on Monday.
With the acquisition, Geely is taking over a smartphone brand that has been losing relevance in recent years, but whose technology could help the carmaker compete in a market that is increasingly focused on software and services.
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"Meizu's market share in the [mainland] Chinese market has stayed below 1 per cent for several years amid the fierce competition locally," said Will Wong, a Singapore-based analyst at IDC, noting that the brand's market share fell to 0.1 per cent in the first quarter this year. "The acquisition is likely to have a higher focus on enhancing Geely's user ecosystem and its development of intelligent vehicles."
Meizu tried to stay ahead in innovation with the Meizu Zero in 2019, which was the first smartphone without any ports, but its market share has since fallen to just 0.1 per cent in China. Photo: Ben Sin alt=Meizu tried to stay ahead in innovation with the Meizu Zero in 2019, which was the first smartphone without any ports, but its market share has since fallen to just 0.1 per cent in China. Photo: Ben Sin>
Wuhan-based Xingji Shidai bought its stake from Meizu founder Huang Xiuzhang, whose current 9.8 per cent stake is down from 49 per cent, and Taobao China Software, a unit of e-commerce giant Alibaba, which sold its entire 27 per cent stake, according to the SAMR.
The SAMR document did not disclose the value of the deal. Alibaba owns the South China Morning Post.
"Mobile phones and devices have quickly evolved into mobile terminals and application platforms, which not only allow users to enjoy the fruits of innovation in the quickest manner possible, they also act as a pathway to greater automotive applications," Geely said in a statement, repeating comments from last year when it established Xinji Shidai. "The major trend in the coming future is to create user ecosystems across borders and provide users with a more convenient, smarter, and seamlessly connected multi-screen experiences."
Xinji Shidai has yet to launch any smartphones. Its first one is expected next year, which will be given away as a gift to buyers of Geely's new high-end sports car, according to a report by Chinese tech media outlet Huxiu.
When it launched, Xinji Shidai said that it would leverage "Geely's extensive experience in design, research and development, high-end smart manufacturing, industrial chain integration, vehicle intelligence, software development, and global infrastructure" to cater to the premium smartphone segment.
Geely's acquisition comes amid competition among Big Tech firms and carmakers alike that increasingly treats cars as another connected gadget. The most high-profile forays into the car market by tech firms include efforts from Xiaomi and Huawei Technologies Co.
Xiaomi kicked off an electric car project last year with an initial investment of US$1.5 billion. The Beijing-based smartphone brand expects to spend up to US$10 billion over the next decade.
Huawei has been hoping to turn a version of its HarmonyOS into the dominant operating system for new cars in China. Since its lucrative smartphone business was crippled by US sanctions, it has been moving into several new business segments.
Geely announce the founding of Xingji Shidai on September 28, 2021, part of an effort to bolster the carmaker's digital ecosystem. Photo: Weibo alt=Geely announce the founding of Xingji Shidai on September 28, 2021, part of an effort to bolster the carmaker's digital ecosystem. Photo: Weibo>
Internet search and artificial intelligence giant Baidu has also been moving into the car market through automation, releasing a virtual model of its first concept robocar through its electric vehicle unit Jidu Automotive last week. It plans to mass produce EVs by next year.
Meizu, founded in 2007, was once one of the most popular smartphone brands in mainland China. Cutthroat competition over the years has since led to a few dominant domestic smartphone brands, led by Honor, Oppo, Vivo and Xiaomi.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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