Chinese company LeEco made a name for itself in its home country with a series of smartphones, smart TVs, and digital media services. Last year the company entered the US market by launching its first phones and TVs designed for the United States… and by announcing plans to acquire TV maker Vizio for $2 billion.
Now it looks like that acquisition isn’t happening. The announcement comes on the heels of reports that the deal was stalled and that LeEco is running into money trouble and scaling back its plans for the United States.
Now LeEco says the “merger agreement to acquire Vizio will not proceed due to regulatory headwinds.”
The two companies do plan to continue working with one another, which means you could see LeEco software running on Vizio smart TVs.
But this is the latest in a string of stories suggesting that LeEco’s international expansion has not been going well. On the one hand, not spending $2 billion on a merger could save LeEco some cash. On the other hand, the deal probably would have been one of the simplest way for LeEco to gain some market traction in the States, where Vizio TVs are already pretty popular.
What are the odds that they will be selling anything under their own brand in 2 years? They should have stayed in TV and just bought Visio. Instead they wasted it trying to buy phone market share.
Phone wasn’t their problem it was electric cars, they sunk huge resources into that just to get into the prototype stage, it was a colossal waste of resources.
For those that don’t know LeEco is essentially Chinese Netflix that also makes the hardware you watch it on too but in China the app store model is much more competitive ironically due to freezing out Google so many home grown ecosystems are profitable.
I always though LeEco expanding internationally was dubious at best as it would require competing against Netflix/Amazon and selling good quality hardware at cost to lure consumers in to the LeEco platform.
“regulatory headwinds” translation we’ve run out money.