The Chinese tech firm LeEco paid Yahoo $250 million for a nearly 50-acre development site in Silicon Valley as it prepares to enter the U.S. smartphone market.
LeEco is one of the largest online video companies in China and also offers four smartphones under its Le brand. It claims roughly 5,000 employees and has expanded to India. PhoneScoop reported last week that it plans to launch both phones and a video streaming service in the U.S. this fall.
The company has reportedly been approved to build up to 3 million square feet of space at its newly acquired site in Santa Clara, California, accommodating as many as 12,000 employees. LeEco currently leases a building in San Jose that serves as its North American headquarters, according to Silicon Valley Business Journal.
PhoneScoop reported that LeEco is in talks with U.S. video providers to offer both recorded and live content on its phones. The devices will be available unlocked and will also support more familiar video services.
LeEco has more than 400 employees in the U.S. and plans to expand to 1,000 workers by the end of the year.
LeEco reportedly generated $1.6 billion in revenue in 2014, and the company is clearly moving aggressively to grab a substantial slice of the U.S. smartphone market. But the Chinese vendor faces some major challenges: The U.S. market is dominated by Samsung, which continues to ride the success of its Galaxy S7 and S7 Edge, and Apple. And selling unlocked phones will be especially challenging in a market where carriers represent the primary distribution channels. LeEco may have to offer some extremely compelling video content on its phones to make much of a dent in the U.S.
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