Geely, the Chinese automotive company that owns brands such as Lotus, Volvo, and Polestar, is now about to join the mobile phone market.
Reports from a Chinese website 36Krypton revealed the conglomerate is planning to purchase Meizu - the smartphone company that has been around for nearly 20 years, but hasn't been doing so hot lately. Due diligence is already underway, and Geely expects to launch its first smartphones in 2023.
The Chinese company has been eyeing the mobile business for some time and created a separate entity called Xingji Times dedicated to it. It snatched some key executives from ZTE, Xiaomi, and Oppo to help its efforts.
The source revealed Geely has already invested nearly CNY10 billion ($1.5 billion) in this new enterprise, not including the potential Meizu acquisition costs. Spokespeople on both sides declined to comment on the matter.
36Krypton quoted Li Shufu, Chairman of Geely Holding Group, who said the mobile phone is the vehicle of software innovation that allows users to experience technology as soon as it is reliable, and he wants to do the same to the automotive market.
Geely is still working on finding a partner to manufacture its smartphones, and Foxconn will likely be the choice. The whole R&D process will be handled in house, which explains the need for the acquisition.
Currently, the smartphone company is shipping just under 1 million units per year, which is nowhere near the peak of 20 million several years ago. The main issues in front of Meizu are the limited production capacity of OIS modules and unsuccessful marketing campaigns.
For example, the Meizu 18 launched in March 2021 with clean OS, no pre-installed apps and no ads, but it never managed to impress local consumers and lost further ground.
Source (in Chinese)