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Why Chinese Car Giant Geely Bought Struggling Smartphone Maker Meizu

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Chinese billionaire Li Shufu’s Geely has obtained Meizu, a person of China’s earliest smartphone makers, in a move anticipated to enable the Chinese car or truck large build autos with features that are joined to the energy of handsets.

Hubei Xingji Shidai Know-how, a subsidiary of Geely, completed the order of a 79% stake in Meizu. Geely, which also owns Volvo and a stake in Mercedes-Benz Group, sees the acquisition generally as a way to absorb technologies for modern day vehicles, analysts say. They be aware that Meizu takes advantage of its homegrown Android working system, Flyme, which is customizable and lets smartphone users set up non-Android apps.

“By buying the entirety of Meizu, Geely would have access to Meizu’s Android-based operating program, the Flyme OS, which can help Geely gain a front-row seat in essential insights on the feasibility of clever and autonomous driving,” suggests Yang Wang, London-based senior investigation analyst at Counterpoint Investigation.

“It would seem to all the gamers concur that the car or truck will develop into a more standard piece of hardware, with software program becoming the bedrock for foreseeable future automobiles and program updates, encounters and knowledge staying the important differentiator involving manufacturers,” Wang adds.

In a further bid to work with buyer electronics, Geely fashioned a production enterprise very last year with Taiwanese assembler Foxconn Technological innovation.

The Meizu acquisition goes against a craze of huge-name developers in shopper electronics acquiring into electrical autos more than the previous 3 many years. Sony, for instance, declared in March it was joining forces with Honda to create electric cars. “Once a leader in purchaser electronics, Sony has some highly developed software package and sensor giving in its arsenal which will be used to make a mark in the automotive field,” Counterpoint senior investigation analyst Soumen Mandal reported of Sony’s electric vehicle plans.

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Geely final 12 months produced the Geometry EX3 electric automobile, which it named its most economical EV launch to day at $9,200. Its Zeekr electric-auto brand name designed final calendar year might operate the Flyme OS, a Geely supporter club website says.

Meizu could be on the lookout at options outside the cellular phone space, much too. Its handsets commanded considerably less than 1% of the Chinese marketplace in the very first four months of 2022, Wang notes. The firm, which was started in 2003, arrived at a China marketplace share of approximately 17% in 2017 before falling at the rear of other Chinese manufacturers. Meizu suggests it now has 600 retail outlets plus 1,000 staff members.

The smartphone developer’s chairman, Shen Ziyu, has been quoted saying his firm and Geely believe that they can uncover consumers by presenting differentiated goods, notably quality types.

Smartphones and contemporary automobiles present signals of performing in tandem, states Neil Mawston, executive director with industry exploration organization System Analytics. “Smartphones are a gateway to the long run automobile,” he suggests. “Smartphones can unlock doors, get started engines, provide unrestricted material to the head-unit, park the automobile and remotely manage a battery charger.

“The Geely-Meizu offer may possibly be a nod to Apple,” Mawston provides. “If Apple launches an iCar in the long term, it will undoubtedly be integrated with the Apple iphone, iPad, Enjoy, and any VR (digital truth) or AR (augmented actuality) eyeglasses. Geely could be smarter than we comprehend.”

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