Amid rumors swirling around online, today it's official: Chinese Internet ecosystem company LeEco will acquire Vizio's hardware and software business, including all technology and intellectual property, for the princely sum of $2 billion. Vizio's data business, Inscape, will spin off and operate as a separate, privately owned company.
LeEco founder and CEO YT Jia (left) and Vizio founder and CEO William Wang shake hands at a press conference announcing the merger of their two companies. (Photo by Jeff Lewis/AP for LeEco)
I had not heard of LeEco before, and I wondered what an "Internet ecosystem company" might do. According to the press release, "LeEco is a leading global technology company that provides breakthrough experiences through its open, integrated ecosystem of streaming content, platforms, and smart devices that fit perfectly into a broad spectrum of lifestyles. LeEco opens new opportunities for consumers by offering a wide array of next-generation connected products—including smartphones, TVs, bikes, and cars—and content spanning sports, film, and live entertainment. LeEco was recently named one of Fast Company's 2016 Most Innovative Companies, and Alphr's Best of Mobile World Congress—Most Innovative Company."
Okay, that sounds like it might be a good match with Vizio. YT Jia, LeEco's founder, chairman, and CEO, agrees, saying, "LeEco believes in breakthrough technologies, a complete ecosystem, and disruptive pricing. Acquiring Vizio is an important step in our globalization strategy and building our North American presence. From its inception, Vizio introduced a disruptive business model that changed the industry and aligns with our vision of breaking boundaries to deliver consumer-focused products, software, and services."
Of course, Vizio is no stranger to disruptive business models, having shaken up the smart-TV and soundbar markets with high-quality products at surprisingly low prices ever since its founding in 2002. And the company knows a thing or two about ecosystems of hardware, software, and services; the most recent example is Vizio's new SmartCast system, which integrates the delivery and control of content across various devices.
According to the press release, "The acquisition benefits both companies with Vizio offering LeEco a steady installed base of users and a brand that is both popular and successfully distributed throughout major North American retail channels. LeEco provides Vizio immediate global scale to bring its innovations to consumers worldwide. Like LeEco, Vizio shares a similar vision of creating premium products with the latest innovations and making them accessible for everyone—from budget-minded students to custom home-theater cinephiles—without sacrificing quality or performance."
The sale is expected to close during the fourth quarter of 2016, subject to the customary conditions. Vizio's executive management team will remain in place and continue its operations as an independent subsidiary from its headquarters in Irvine, CA. Also, Vizio products will continue to be sold through its existing distribution channels and supported by the same North America-based customer service.
Change is always disruptive, but it seems like LeEco and Vizio have a lot in common. Of course, time will tell, but I look forward to seeing what this merger might mean for Vizio products in the future.
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