Executives at Chinese smartphone OEM Gionee are now reportedly discussing bankruptcy and possibly the liquidation of the company after failing to pay approximately 400 suppliers, financial creditors, and marketing firms, according to Beijing Youth Daily. Initially, the organization will be examining the possibility of filing for bankruptcy and looking to reorganize, pending input from key investors. If that fails, Gionee will enter into liquidation but at least 20 core suppliers are reported to have filed a suit against the company in the meantime for the company's refusal to pay on debts owed. Gionee chairman Liu Lirong has also reportedly come clean about a gambling problem, admitting that around $143.8 million of the total $2.45 billion owed by the manufacturer was lost due to the habit. Mr. Liu Lirong says that, on average, Gionee has been losing between $143,804 to $28.7 million every month since the trouble began, in spite of ongoing sales of popular devices. Reports from China have alleged that Mr. Liu Lirong's gambling debt and excessive spending might have surpassed the $1 billion marker.
Background: The latest news surrounding Gionee follows at least two reports from earlier this year indicating that the company was in trouble financially. As recently as March, Gionee reportedly notified employees at its Dongguan factory that it would be cutting jobs. At the time it was reported that the smartphone maker would be keeping employees with special conditions — such as pregnant women — and that it would compensate those workers it did let go, pursuant their contracts with the company. In April, Gionee confirmed that at as many as half of its 8,000 headquarter employees would be let go as it looked to restructure. With those initial reports, chairman Liu Lirong, excessive spending, and gambling were said to be central to the company's ordeal at the time. It was originally hoped that restructuring could help the company regain its standing in the market since Gionee had once been considered among the top competitors in various regions around Asia.
The company was in fact still releasing high-value budget-friendly handsets for the India region under the Gionee branding as recently as late April of this year, in spite of the financial woes. The last devices launched were its $135 Gionee F205 and $210 Gionee S11 Lite. The former of those was a 5.45-inch handset with an display resolution of 1,440 x 720 and an aspect ratio of 18:9. Gionee's custom Android overlay ran atop Android 7.1 Nougat on that smartphone, driven by a quad-core MediaTek MT6739 SoC. Memory for that dual-SIM-enabled smartphone was set at 2GB while storage came in at 16GB. VoLTE support, a 3.5mm headphone jack, 8-megapixel primary camera, 5-megapixel selfie snapper, and a 2,670 mAh battery rounded out that package. Conversely, the Gionee S11 Lite had similar resolution specs but with a 5.7-inch display panel. It also shipped with an octa-core Snapdragon 430 SoC, double the RAM, and 64GB storage. Software remained the same for the more pricey device but a 13-megapixel dual-camera setup could be found at the back and a 16-megapixel selfie camera was included. The battery was bumped up to 3,030 mAh capacity too and Gionee included a fingerprint scanner on that larger handset.
Impact: Gionee appears to be on the verge of disappearing altogether at this point and is not at all likely to release any more devices in the immediate future. The company does plan to continue honoring its warranty program for each of its devices until its supply of units runs out and to provide support where possible. So current owners won't need to immediate rush out and purchase a new smartphone if they happen to have picked up one of Gionee's more recent handsets.