Leshi Internet Information & Technology, popularly known as LeEco, has acquired an additional 11% stake in Coolpad, one of China's largest smartphone companies. This purchase makes LeEco the biggest shareholder of Coolpad at 28.9%. LeEco obtained the 11% share for $135 million (1.047 billion HKD) from the former largest shareholder, Data Dreamland. The purchase was confirmed by LeEco founder Jia Yueting during a speech at Russia's St. Petersburg International Economic Forum. LeEco had formerly bought 18% of Coolpad's shares on June 28th, 2015 for $353 million (2.74 billion HKD).
LeEco is relatively new to the smartphone market, owing its popularity to being one of the most popular video streaming services and contents ecosystem. The Chinese conglomerate has enjoyed massive success, selling more than 10 million smartphones in a year by April. The second quarter single month sales of LeEco have already exceeded 2 million with expected third quarter sales to be over 3 million as claimed by the company.
Coolpad, however, is one of the largest smartphone manufacturers in China, with a significant overseas presence. They have seven major R&D centers across the globe, with a workforce of 3000 in their R&D team, and holding over 7000 patents, 500 of which are overseas. They have an extensive sales network in North America, Europe, Asia and Africa as well. This integration will not only allow LeEco the extensive product research from Coolpad, but also its sales and after-sales capabilities, and aligning Coolpad's products with LeEco's ecosystem model. It will help LeEco boost sales in North America, and Europe while being able to introduce its content services to the one billion Coolpad devices across the globe, ushering a major growth phase for the company.
According to LeEco, after the integration with Coolpad, a conservative estimate stands at the sale of 50 million to 60 million smartphones by this year and exceeding the hundred million mark by 2017, making LeEco one of the largest smartphone companies at a global scale. Prior to the deal, Coolpad's sales target was $4.6 billion (30 billion yuan), with 70% sales from China, and the rest overseas. The new target is to increase foreign market sale by 100% each year, bringing the overseas sales at par with Chinese sales by the next few years.