Free metal jacket: China’s LeTV giving away Le 1s smartphone to loyal subscribers of its video-streaming services as hardware takes back stage
Company says even retail price of 1,099 yuan is below cost; expects to profit from combination of fixed contracts and migration of customers among various services
Le 1s, the new flagship smartphone from LeTV, is retailing for 1,099 yuan (US$173) in China despite costing over 1,300 yuan to produce per unit, the Chinese entertainment company said on Tuesday.
Its specifications keep pace with most flagship phones from other makers: It features a 5.5-inch screen, 2.2 Ghz processor, 3G of RAM and 32-gigabytes of storage.
However it is still significantly cheaper than the new iPhone 6s (6,888 yuan) or Note by Xiaomi (1,799 yuan), the leading smartphone vendor in China often billed as a cheap Apple clone.
“The new price shows we are at a time of negative profit for hardware,” said Jia Yueting, CEO of LeTV Holdings, at a launch event in Beijing.
China’s smartphone market is become saturated as local players like Xiaomi, Huawei and ZTE vie for customers with more established foreign brands such as Apple, Samsung and LG.