LeEco Launches in North America

//LeEco Launches in North America

LeEco Launches in North America

Gerry Purdy J. Gerry Purdy, Ph.D.
Principal Analyst, Mobile and Wireless
Gerry.Purdy@aotmp.com | LinkedIn

LeEco Launches in North America

This Chinese Company is Making Smartphones, TVs, Bikes, VR Headsets and Electric Cars with a Common Platform (EUI) for Information Sharing Across All Their Devices

LePro SmartPhone

Every once in a while, something happens in the tech industry that causes you to stop in your tracks and realize that the mobile and tech world in which you live is about to change. This happened on Oct. 19 when I attended the launch of LeEco (pronounced LAY-EEco) held at the Palace of Fine Arts in San Francisco.

The event marked the official launch of LeEco in North America and signified its expansion outside of its China birthplace. At first glance, LeEco appears to be a consumer-centered device, however, its appeal will challenge both Apple and Samsung in the enterprise domain as well. LeEco is bringing the vision of its Chairman, Jia Yueting (“YT”), to create an ecosystem that enables content (some proprietary and some licensed) to the screens that people interact with in their lives: TVs, smartphones, VR headsets, electric bikes and self-driving electric cars. I also suspect its proprietary content will likely be made available to other ecosystems such as iOS or Android via future partnerships.

This bold effort is getting a lot of attention due to its previous success in China because:

  • It is the largest seller of TVs in China (under its LeTV brand)
  • The company is the third-largest seller of smartphones (under the Lexx brand)
  • The company has created two very successful streaming services – both of which enable LeTV and LeEco smartphone users to view live video content

YT firmly believes that the center of media and its distribution comes from being integrated into Silicon Valley and Hollywood. He has invested in a number of Hollywood relationships that will result in content being made available on the LeEco devices. The company plans to invest in creating and acquiring content relevant to the North American market via movies and TV that can be streamed to multiple screens, including phone, TV, bike or car. LeEco has invested a great deal of energy building its revolutionary Ecosystem User Interface (EUI), which is an intuitive interface that unifies its ecosystem and puts content at the heart of the experience. It is LeEco’s answer to the fragmented user experience.

With the User Planning to User (UP2U™) program, LeEco gives users a voice in how the ecosystem evolves, and the opportunity to co-create the experience and the next-generation of LeEco products. When individuals share feedback with LeEco via user trials, social channels, on-device apps and at events, their comments are shared with the User Experience Center (UEC) and research & development (R&D) teams to influence product updates and shape future offerings. If they can pull this off in an orchestrated and controlled manner, it could be a significant new paradigm in the development of new products.

At the launch, LeEco was supported by key partners like:

  • Lionsgate Entertainment Partnership – Jon Feltheimer, CEO of Lionsgate, announced LeEco has licensed Lionsgate movie and TV content for distribution through the LeEco family of devices.
  • Qualcomm – Dr. Paul Jacobs, Executive Chairman of Qualcomm, announced that they are working with LeEco to develop high-end processors and communications for LeEco products.
  • Vice Media – Ben Dietz, Sr. VP of Vice Media, announced its partnership with LeEco to share Vice Media content.

TV Lineup

LeEco announced in July its intention to acquire Vizio, the leading US TV company, to give it more TV devices in which to distribute content. Vizio gives LeEco strong retail distribution for TVs while the LeEco branded ecotvs will be sold online. It also introduced a flagship ecotv, the advanced high-end 85” Ultra HD TV (uMAX85).

The line of TVs has a brand name of Super 4, and includes 43-inch, 55-inch and 65-inch models. It offers premium features accessible for all with a variety of screen sizes. You can see a summary of the LeEco ecotv offering in the following diagram/chart:

LeEco-tv-specs

Smartphone Lineup

There are two smartphone models: The Le S3 and the LePro 3. They have taken a different approach with the design of these models. While others have produced one model with a smaller display and a second model with a larger display, LeEco opted to develop two phones with the same 5.5-inch display. The differences between the lower-end Le S3 and the higher-end LePro 3 are:

  Le S3 LePro 3
Processor Qualcomm Snapdragon 652 Qualcomm Snapdragon 821
Battery 3000mAh 4070mAH
Storage 32GB 64GB
Price (LeMall) $249 $399

Both of these devices look very similar when holding them in your hand. You will notice that the LePro 3 is a bit heavier due to the larger battery. Thus, the higher-end system is faster, has more battery life, and has more storage. Because it is based on Android, users can add storage via a microSD card.

LeMall

LeEco is also challenging Amazon in the area of e-commerce, bringing its LeMall to the U.S., which will provide a direct-to-consumer distribution network.

The LeEco TVs and smartphones will be sold (at least initially) online via the LeMall, which opened on November 2nd.  It’s tying two incentive programs to the online experience: LeRewards, where you earn points from purchasing, and EcoPass, an enhanced annual services plan.

LeRewards

LeRewards helps consumers get discounts on LeEco products (phones, TVs, audio headsets, VR headsets, bikes and (I presume) eventually the LeEco LeSee electric autonomous driving car). For example, buyers of TVs will get $200 for the Series 4 and $1,000 for the uMax 85. The LeRewards have a unique quality in that they can be applied to the current purchase as well as be used toward future purchases. In this manner, LeRewards acts more like a discount program, yet is clearly designed to act as a way to build customer loyalty.

EcoPass

LeEco has created a premium annual services plan called EcoPass that operates in a manner similar to Amazon Prime. EcoPass members get free access to movies and TV shows from MGM, Lionsgate, VICE and Showtime. Those who acquire the high-end Le Pro3 smartphone will receive EcoPass free for three months and $100 per year thereafter. EcoPass Members also get discounts on future purchases, and have access to a variety of entertainment options, cloud services, extended warranties and exclusive discounts on LeEco products and services.

In summary, the EcoPass includes:

  • Unlimited photos and videos
  • 5TB of cloud storage (Impressive!)
  • Extended warranties on LeEco products
  • Unlimited movie streaming on LeEco-provided content
  • Access to EcoPass discount days

There are some who say that the mobile market doesn’t need another ecosystem outside of Apple and Samsung. However, it’s not the Apple or Samsung ecosystems in which LeEco is challenging; it’s the entertainment ecosystem players such as Comcast, AT&T and Verizon that are building ecosystems of original content distributed through their own networks. LeEco has a good chance to become successful as these other players in the US are just forming; e.g. AT&T’s recently-announced acquisition of Time Warner with it troves of content and original programming like HBO and CNN. LeEco already has live video streaming and access to Hollywood productions, and creates own content (via partnerships) that will most assuredly grow over time. Take a look at the following list of movie, TV and video services that are provided at launch:

LeEco-launch-partners

I think this list provides a solid foundation for access to valuable movie and TV content.

UP2U

LeEco-up2uLeEco believes that it’s important to get feedback from customers so it can quickly enhance and improve its products. It has put its vision into practice by currently getting feedback from people who call in for customer service/tech support and not only using it to fix the problem, but to provide feedback to marketing and engineering so that suggestions made by customers can be reviewed and considered for implementation. You can see how the UP2U program works in the diagram.

LeEco’s entire ecosystem is really quite amazing.

LeEco-ecosystemAOTMP Perspective

At first, you might think that LeEco is just a consumer company and everything it does is targeted at the consumer market and not the enterprise. You could have said the very same thing about Apple when it introduced the iPhone in 2007. It looked, at the time, to be strictly a consumer play. However, over the ensuing 10 years, Apple has built a major presence in the enterprise market.

With that said, some will go out and buy the Le S3 or Le Pro3 and want to use them at work much like they would use any other Android phone. After all, they will run any Android app that’s in the Google Play store. It simply has to be certified to be an approved device to run on the enterprise network.

One step up from the simple process of allowing LeEco smartphones to run on the enterprise network is to certify that the enterprise’s MDM software can be run on the LeEco phones.

There are a few pieces to the total LeEco story that are missing or, at least, have not yet been announced. I have considered whether LeEco will:

  • Extend EUI to run on smartphones outside of what LeEco produces. It seems reasonable that it could either license EUI to others (e.g. Apple, Samsung) or provide it through the Apple App Store or Google Play and, in essence, have EUI become the LeEco streaming video player for those who sign up for EcoPass.
  • Produce a line of LeEco tablets similar to the iPad that would enable playing movie and TV content in a larger format.
  • Produce a line of LeEco smartwatches like what Apple and Samsung have done; and even enable playing some streaming video through the watch display.
  • Acquire a line of PCs, as it represents important screens that could operate within the EUI ecosystem.
  • Embrace the enterprise market with software, services and partnerships that enable the LeEco devices to be aggressively used in the enterprise.
    • Enhance the EUI experience for a version (EUIB) for the enterprise.
    • It could setup an enterprise content store to organize and distribute video content to employees.

After all, LeEco device products are screens in which – content can be played. I also expect to see enhancements to the user interface where LeEco doesn’t mean Android standard; but means the unique overall experience that users have, love and appreciate. Google has just shown how to do this with the new Pixel phone.

I expect that if LeEco can truly listen to its customers and partners (UP2U), it can create an ecosystem that can engage, and be embraced by, the people of the U.S.

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2017-01-21T12:31:50+00:00 November 7th, 2016|Categories: Analyst Perspective|Tags: , , , , |