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Qiku stirs up crowded smartphone market

By Gao Yuan (China Daily) Updated: 2015-05-07 07:27

Qiku stirs up crowded smartphone market

Zhou Hongyi, founder and CEO of Qihoo 360 Technology Co Ltd, unveils the smartphone brand Qiku in Beijing on Wednesday. Qihoo is teaming up with Coolpad Group Ltd to supply Qiku handsets. [Photo/China Daily]

Firm expects to zoom past Xiaomi in sales with better looks, pricing

The crowded smartphone market in China is about to add another heavyweight player with industry experts anticipating further price wars among the key players.

Internet magnate Zhou Hongyi threw his hat into the smartphone ring on Wednesday and promised fans "exquisitely made" handsets that will surpass Xiaomi Corp both in quality and price.

"I understand selling smartphones in China is a red ocean market, actually it is an ocean full of blood," Zhou said. The red ocean is used to describe a market packed with players and one in which profit margins are wafer-thin.

"But I am entering the market anyway because I believe there is no market that cannot be overturned and the leaders will not be always on top," Zhou said.

The 45-year-old, who headed Yahoo China in the early 2000s, drove out Internet security firms that charge customers royalties by introducing free-of-charge anti-virus software products about a decade ago. Zhou's Qihoo 360 Technology Co Ltd accounts for the lion's share of the for-private-use free online security market.

His smartphone firm, named Qiku, is a joint venture with Coolpad Group Ltd, a major contract smartphone maker in China. The new brand will unveil three types of handsets running a tailored Android operating system as soon as next month.

"Our device will easily sell at 5,000 yuan ($800) on the market, but we will offer buyers a remarkably lower price," Zhou said, without giving details of the products.

The three handsets will each target low-, mid-and high-end markets with the lowest price tag at around 1,000 yuan, a Qiku employee familiar with the pricing strategy told China Daily.

Local handset vendors opt to lower prices in the highly competitive smartphone market to grab bigger market share, industry sources said.

Hours before Zhou announced the launch of the affordable devices, Xiaomi said it will lower the price of its flagship device Mi Note Pro by 300 yuan.

At a rival show put on by the Beijing-based mobile firm, Xiaomi co-founder Lei Jun gave out free devices to reporters and said he has been trying to lower the price of the high-end Mi Note to maintain the company's lead in terms of market share. The original price for the device was 3,299 yuan.

Lei also indicated that Xiaomi's next focus will be in India and other emerging markets where the competition is not as fierce and no one wants a price war.

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