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Phone maker Gionee in trouble as chairman gambles away company money
Small firms having a hard time as giants dominate China’s maturing smartphone market
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This article originally appeared on ABACUS
It appears another Chinese smartphone maker is getting squeezed out of the picture.
Last week, a report circulating said that Gionee’s chairman Liu Lirong lost 10 billion yuan (US$1.44 billion) of the company’s money when gambling on the US island of Saipan. Liu denied the claim in an interview with state-owned Securities Daily, saying the number is too big to be true. When the state media asked how much he actually lost, he said, “About one billion.” (He didn’t specify whether that was yuan or US dollars.)
He also admitted that he has “borrowed” company funds, and said the amount of money he took will be made public when the company starts bankruptcy reorganization next month.
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You’d be forgiven for not having heard of Gionee, because it has been absent from the international market. Started in 2002, it made its name in China in the feature phone era, targeting the high-end market.
But it has been losing ground since moving into smartphones and has also expanded to producing budget handsets. There, it’s facing fierce competition from the likes of Vivo and Oppo, who dominate cheap phones. Its “luxurious” M2017, launched two years ago with a 7,000mAh battery, a whacky leather cover and costing more than US$1,000, doesn’t appear to have gained any momentum either.
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