Riding China’s smart TV boom, LeEco sees revenue jump 90 per cent in 2015
Analyst expects market to post healthy growth for next few years as consumers upgrade to bigger sets, China continues to urbanise
Chinese entertainment portal LeEco saw its revenue jump 90 per cent to 13 billion yuan (US$1.99 billion) last year as sales of its smart TVs took off, according to a preliminary earnings report filed today.
Its total net income rose over 59 per cent, it reported.
Formerly known as Letv, the Shenzhen-listed company is one of the top providers of smart TVs and online streaming content in China. It also makes consumer electronics.
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LeEco said it sold over three million smart TVs globally last year. Such growth was mirrored on the Chinese mainland, where total smart TV sales peaked at 40 million, up 50 per cent from 2014, according to Sootoo.com.
But China’s appetite for smart TVs - either TV sets, or set-top box with integrated internet features - is growing fast and the domestic market should continue to post healthy growth for at least the next two years, said Hou Changhai, an analyst from Sootoo Institute, the research division of Sootoo.com.
“They are replacing traditional televisions, just as smartphones replaced feature phones.”
LeEco expanded into the smart TV market in 2013 and quickly gained traction with its competitive prices.
These appliances help draw subscribers to its streaming services, which cost upwards of 490 yuan (US$74) a year. If users opt for a longer-term service, the price of their smart TV becomes even cheaper.
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Xiaomi, formerly dubbed “China’s Apple” for its clone-like devices, is another heavy hitter in the smart TV field. It sold over one million units in mainland China last year, according to Wang Chuan, the company’s co-founder and vice president in charge of its TV business.
So as not to lose out, manufacturers of flatscreens and other TVs are also migrating over to this growing industry.
The majority of new TV sets with screens bigger than 55 inches are smart TVs, said Liao, adding that many traditional players are now working with content providers to add value to their devices.
“China is urbanising quickly, and new homes in expanded cities need new TVs,” he added.
“Chinese customers desire a huge screen and will continue to upgrade to bigger TVs.”