Geely's Subsidiary, Xingji Technology, Cooperates With Meizu To Produce Premium Mobile Phones In China

Meizu and Geely's subsidiary joint venture to manufacture premium mobile phones. (photo; twitter @meizu)

JAKARTA - A venture run by the founder of Chinese automaker Zhejiang Geely Holding announced on Monday, July 4 that it will seek to break uniformity in the smartphone industry, after completing the purchase of a majority stake in handset brand Meizu.

The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely chairman Eric Li last year as part of the automaker's foray into the premium smartphone business. The news was first made public in June through a statement from China's market regulator.

The purchase brings Geely, an established Chinese auto company known overseas for its ownership of Volvo, one step closer to entering the highly competitive consumer hardware sector.

"Xingji Technology completed the purchase of a 79.09% stake in Meizu," the company said on Monday, as quoted by Reuters.

Meizu, a nearly two-decade-old Chinese consumer electronics company, rose to prominence early in the first decade as China's up-and-coming Android. However, it was beaten by rivals and now occupies a marginal market share.

Following the strategic investment by Xingji Technology, Meizu Technology will receive access to greater industrial support and resources. Meizu’s Flyme system will integrate with more smart devices to offer users a seamless transition across multitude of devices. pic.twitter.com/vsuXDyTugB

— MEIZU (@MEIZU) July 4, 2022

While Meizu will remain as an independent brand, they will work closely together in areas such as software.

At a press conference broadcast live, Shen Ziyu, Chairman of Meizu and Vice Chairman of Xingji Technology, said that the company believes that they can successfully attract customers by offering differentiated products, especially at premium levels.

"We are from the auto industry and overall car sales have declined, but new energy vehicles are growing rapidly," Shen said. "With regards to smartphones, there are very few choices at the high end, and there are many choices at the lower end, but homogenization is very serious."

The company also says that Meizu has distinguished itself with FlymeOS, its own Android-based customization, and hopes to expand its software across a wide range of devices. They did not disclose the financial terms of the deal.

Xingji Technology also said it is currently developing a portfolio of next-generation smartphones, mobile devices, and smart wearables that will take advantage of expanded reality technology.

Reuters reported in September 2021 that Xingji Technology has a target to release its first smartphone in 2023 and sell 3 million units in the first year.

Xingji Technology will compete with Huawei's spin-off Honor, which currently leads the market, as well as Xiaomi Corp, Oppo, Vivo, and Apple, which maintain a loyal following in China.

Geely's foray into the smartphone sector comes as Chinese consumers demand more smart technology from their cars. For example, technology that supports the ability to use mobile applications from the dashboard of a car. It also comes at a time when the smartphone industry is struggling to grow, both in China and globally.

According to research firm Canalys, worldwide smartphone shipments in the first quarter of 2022 fell 11% annually, while shipments in China fell 17% over the same period. However, the downward trend did not dampen Geely's steps into the mobile phone business.