How Apple-bashing CEO of China’s Smartisan sells product launch tickets, smartphones

Depending on who you ask, Luo Yonghao, the founder of Chinese smartphone brand Smartisan, is either a marketing genius or an overhyped self-promoter. Either way, he has achieved something that even Steve Jobs has not: getting consumers to pay to hear his sales pitch.

Smartisan has set itself apart in the smartphone industry by transforming its annual product launches into variety shows, where people buy tickets to hear Luo’s repartee and revue.

Ticket sales generated by the company’s latest gala event, held at the 80,000-seat National Stadium in Beijing, reached 4.8 million yuan (US$751,000). The audience of 37,000 that showed up on May 15 paid for tickets that cost between 100 yuan and 1,000 yuan, according to Smartisan.

Similar to a major concert or soccer match, there were scalpers outside the National Stadium, also known as the Bird’s Nest, still hawking tickets to the Smartisan event 20 minutes before the show started.

The turnout at the Smartisan event, which was also live-streamed online, showed the continued popularity of Luo, the company’s chief executive and an internet celebrity in China with nearly 15 million followers on microblog site Sina Weibo. He founded Smartisan in 2012 with 8 million yuan as initial capital.

Luo, 47, said at the show that he invited representatives from the Guinness World Records to certify if the event was the biggest smartphone launch ever.

“I don’t know whether we have a record, but telling from the packed audience, I think we did it,” he said.

Such a record has not yet been certified, according to a spokeswoman for Guinness World Records Consulting (Beijing).

She said the final results have not yet been reviewed by the assigned adjudicators and an independent professional auditing firm.

Luo was invited through his representative to comment on this story about his personal and management style, but the Smartisan spokeswoman said the company had no further input.

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The recognition from the Guinness World Records and the publicity generated by Luo may help set Smartisan apart in China’s vast smartphone market, which is dominated by the top five brands – Huawei Technologies, Xiaomi, Oppo, Vivo and Apple.

Those large, deep-pocketed Chinese smartphone suppliers have won a big chunk of the market through aggressive marketing, more attractive handset designs and features, and by offering a wider array of models available in a range of prices to entice both younger and affluent buyers.

That has left an estimated 200 Chinese smartphone companies, including Smartisan, to fight for the scraps. Just two years ago, there were as many as 300 of these firms offering inexpensive, knock-off handsets.

Despite his company’s small market share, Luo, a former English teacher, has helped raise Smartisan’s profile by talking big and bashing the most valuable technology company in the world, Apple, whenever he has an opportunity.

At the show, Luo said his goal was to “make Smartisan a great company like in the era of Jobs” and deliver products that surpassed Apple’s iPhone, iPad and Mac line of personal computers.

Luo, who has publicly admired the late Apple co-founder Steve Jobs, said at the Smartisan show that the iPhone maker “has lost its soul” since Jobs died, which has led to a deterioration in the design and performance of Apple products. Luo said he stopped using iPhones since the iPhone 6 model was released.

He also predicted that Apple “will copy us like crazy” after Smartisan launched its new R1 smartphone model and the TNT Station, an all-in-one personal computer that uses the Android operating system.

There was no immediate response to inquiries made to an Apple representative in China on Tuesday.

The R1, the design of which bears a resemblance to the iPhone, was “the best-looking white-coloured smartphone in the market”, according to Luo. This smartphone sells from 3,499 yuan to 8,848 yuan.

It is also the first smartphone in the market with 1 terabyte, worth 1,000 gigabytes, of internal storage capacity and the first one to power a personal computer, which is the Smartisan TNT Station.

The TNT Station, which resembles Microsoft’s Surface Studio, has a large 27-inch multi-touch 4K display that can stand up like a regular monitor or swivel to sit on a desk.

It has no built-in storage or RAM because it serves as a giant display for the R1 smartphone, which connects to it via a dock. When connected, the Station runs Smartisan’s modified version of the Android operating system. The TNT Station will sell from 9,999 yuan to 14,999 yuan.

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Luo predicted the Smartisan TNT Station will “redefine PC for the next decade” because it makes Apple’s Siri and other voice-activated smart assistant interfaces look all wrong.

It allows users to touch a specific area on screen and then talk to the computer to execute a command. For example, a user can tap a particular sentence on screen and ask to change its font.

The voice-recognition technology used by Smartisan is backed by iFlyTek and Trio, two artificial intelligence companies in China. The company is also working with 7invensun, a Chinese start-up focused on eye-tracking technology.

But just how good are Smartisan’s latest products?

“One terabyte on a smartphone seems excessive at this point; if one isn’t storing a lot of 4K video content locally, then one has to wonder if it’s just about bragging rights,” said Bryan Ma, a vice-president at technology research firm IDC.

“The TNT Station looks bold, but phone docking solutions like this face performance challenges. Apps won’t likely scale properly to a large screen in landscape mode with a keyboard and mouse for input, compared with a small-screen phone in portrait mode using touch input that the apps were originally written for.”

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The outsize personality of Luo has its pros and cons. While it can garner attention and help the brand gain prominence, especially important for a relatively unknown brand seeking to stand out from a sea of competitors, the same shtick can also land the company unwanted attention.

James Yan, research director at Counterpoint, said Luo’s personal influence has eclipsed Smartisan’s brand and products.

“Since he is very outspoken and his approach to marketing may make the public feel that he is more of a bragger, Luo will most likely be dragged into petty arguments which may hurt Smartisan’s brand and products,” Yan said.

Still, Smartisan has seen reservations to purchase the R1 exceed 230,000 on the JD.com online shopping platform even with the higher smartphone prices.

Smartisan has also started pre-sale for the TNT Station on its website. Shipments start on August 31.

At the launch last week, Luo’s presentation of the TNT Station’s touch and talk capability was marred by glitches that resulted in a failed demonstration.

“I am a bit emotional now,” Luo said several times during the event, especially when he described to the audience how difficult it was for the company to work with limited funds and manpower.

Some employees have been sleeping in the office in the past six months, trying to come up with the best products for consumers, according to Luo.

“I only want to change the world with technology,” he said.

It is a sentiment that has resonated well with Luo’s long-standing supporters.

Chloe Liu, who works in the financial industry in Beijing, said she and her boyfriend are big fans of Luo, more than Smartisan, and watched the company’s event online.

“The two products launched are too expensive, and we are struggling to decide whether to purchase them or not,” Liu said in a telephone interview. They had previously bought four Smartisan smartphones.

“My boyfriend fully supports Luo’s vision, while I think Luo should be less emotional in his speeches.”