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LeTV makes 'smart' move with Internet sets

Updated: 2013-10-11 07:47
By Gao Yuan ( China Daily)

LeTV.com, one of the biggest online video providers in China, released a new line of low-priced Internet televisions on Thursday in a bid to achieve its 5 million unit sales goal and crush rivals.

Industry analysts said that LeTV's move will alter the landscape of the nation's emerging smart TV sector.

Selling at 2,999 yuan ($490) for the high-end three-dimensional version, the 50-inch TV is cheaper than smaller products released by other vendors including Xiaomi Corp and Alibaba Group Holding Ltd.

The average price for a 50-inch smart TV is more than 5,800 yuan, according to JD.com, a leading e-commerce website.

"The new release will help us beat our competitors because of a price advantage and our large content resources," said Jia Yaoting, chief executive officer of LeTV.

"Our first step is to increase the smart TV penetration rate among Chinese netizens who are more comfortable watching online video programs."

The country had more than 590 million Internet users as of June 30, data from the China Internet Network Information Center show.

Jia said earlier this year that LeTV aims to sell 5 million Internet smart TVs within three years.

The Shenzhen, Guangdong-listed company has been actively tapping into the smart TV market since last year.

It teamed up with energy-efficient chip producer Qualcomm Inc and electronics contract manufacturing company Foxconn Technology Group to produce smart TV products.

The penetration rate of smart TVs will hit 47 percent by the end of 2013 as Internet companies enter the market, local research company All View Consulting said.

"The dotcoms are playing an important role in the country's TV industry because they see TVs in the living room as a new traffic source," said Zhou Xiaoxiao, an analyst with AVC.

Smart TVs are equipped with an open-source platform, video on demand and user interactive features.

Zhou added that the competition of video resources and the price tag of TVs will be the crucial battles for the Internet companies.

All of the nation's top three Web companies - Alibaba, Baidu Inc and Tencent Holdings Ltd - have announced plans to join the smart TV fight this year.

Social network and gaming giant Tencent was LeTV's major partner in TV sales and development.

On Sept 30, LeTV announced it will spend about 900 million yuan to purchase Dongyang Huaer Entertainment Media Co Ltd, a TV series production company whose sensational drama The Legend of Zhen Huan has brought more than 3.5 billion views for LeTV's flagship video website.

The buyout of upstream assets will arm LeTV with a more integrated production line and help the company to build an ecosystem big enough to support the hardware production, said the company in a statement.

Boosted by LeTV's new moves and the smart TV frenzy in China, the shares of LeTV hit a record high on Thursday. Closing at 42.37 yuan, its price was up 9.99 percent from Wednesday, the limit for issues trading on the Shenzhen Stock Exchange.

 
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