Seen as products that will open up overseas markets
Beijing-based leading online video service provider Leshi Internet Information and Technology Corp (Letv) on Thursday unveiled its new generation of smart televisions, which the company regards as products to open up overseas markets.
Letv launched six models, adopting the Android 5-based EUI5.5 TV operating system and applying LG panel displays with sizes ranging from 40 inches to 65 inches.
The company said that the six models are part of Letv's globalization strategy. "Letv will be introduced into the US market in the fourth quarter of the year," said Liang Jun, president of Le Shi Zhi Xin, a TV subsidary of Letv, at a press conference held in Hong Kong on Thursday.
Different from previous TV sets, the new generation will not be sold bound with Letv's online content service fees.
"The ecosystem of Letv is becoming more mature, and we have confidence that consumers who bought Letv's smart TV sets will purchase our online content services," which can help offset the hardware costs, said Liang.
"It's a bold move, as it is hard to tell whether Letv's business model, gaining profit not from selling TV sets but from online content and value-added services such as e-commerce, can be successful," said Zhang Bin, director of China Market Research at US-based DisplayResearch.
Chinese consumers are still accustomed to enjoying free online content, Zhang noted.
Sporting a full-metal frame and cloud-based software, the new generation of TVs will be sold at prices ranging from 1,699 yuan ($266) to 8,499 yuan.
Analysts emphasized the importance of the X55 Super TV model, which will be sold at 3,699 yuan, as the 55-inch smart TV is widely considered as China's mainstream product of the year.
"The new TV will further enrich Letv's smart TV family, which can help the company gain more potential users for the consumption of its online content and services," Ma Shicong, an industry analyst with Beijing-based Analysys International, told the Global Times on Thursday.
Letv is not the first company to dip a toe in the 55-inch smart TV segment this year. Its rival Xiaomi Inc already launched its 55-inch smart TV model in late March at a price of 4,999 yuan.
Data from Beijing-based market research firm AVC showed in July that in the first half of the current year, the penetration rate of 55-inch TV sets reached 53 percent.
The 55-inch TV has become a red-hot segment among manufacturers in China and abroad this year, because that size of TV set is currently the most economic and efficient model that companies can produce to satisfy consumers' demand for large screens, said Zhang.
"Many panel makers in China are increasing production capacity of the large-sized 8.5 generation liquid crystal display [LCD] panels, lowering the cost for manufacturing 55-inch TV sets," Zhang noted.
Given the reduction in costs, the average market price for 55-inch models in the first half dropped by about 2 percent from the second half of 2014, according to AVC.
Aiming to sell more than 3 million smart TV sets this year, Letv disclosed in its half-year financial report that the company sold 1 million sets in the first half of the year. The sales target can be met, as the company's possession of valuable online content, exclusively only on its smart devices, makes its TV products more appealing than its peers, said Zhang.
However, it seems that Letv, like other Internet companies, needs more time to persuade people like Xiao Yue, a 30-year-old Beijing resident whosaid that he prefers traditional TV makers such as Sony Corp and Sharp Corp in terms of display and imaging technology.
China now holds the largest share of the global smart TV market, thanks to the efforts of not only traditional TV vendors but also new rising stars such as Xiaomi and Letv on smart TV development, showned a report issued by Taipei-based Market Intelligence and Consulting Institute in May. The institute estimated that the worldwide smart TV shipment volume would reach around 88 million units in 2015, compared to 80.4 million in 2014.
