acquisition

Chinese smartphone maker LeEco has acquired US based consumer electronics manufacturer VIZIO for $2 billion. Post acquisition, VIZIO’s technology patents, intellectual property, hardware and software business will be owned and operated as a fully owned subsidiary of LeEco, while VIZIO’s data business ‘Inscape’ will be spun off and operated as a separate, privately owned entity. The transaction is expected to be closed during the fourth quarter of this year and is subjected to shareholders, and other regulatory approval.

The VIZIO executive management team will retain its position and operate independently from its existing headquarters in Irvine, California.The VIZIO brand and its portfolio of products will continue to be sold through its existing distribution channels and its customer service will also remain in place.

Founded in 2012, VIZIO manufactures branded consumer electronics products including Smart TVs, speakers, and a SmartCast app for casting or streaming content from smartphones and other devices onto VIZIO TV’s. Interestingly, LeEco also in into the business of manufacturing a range of smart LED TVs apart from smartphones, and even provides online streaming of music and live sports content as well. Recently in April, it unveiled a new range of Smart TVs, smartphones, and VR headset and an autonomous electric vehicle concept.

However, all this is fully rolled out in China, US and Hong Kong, and LeEco had entered India this year with two smartphones launches, while providing live streaming of video content . In China, the firm claims to have a content library of more than 100,000 episodes of TV shows and over 5,000 copyrighted films, under its own production house named Le Vision Pictures (LeVP).

Allegations of data collection

VIZIO was sued last year in November in two separate California courts for an alleged data collection of its users viewing habits via its smart TVs through a Cognitive Automatic Content Recognition (ACR) technology, which was rebranded as“Inscape Data Services”, as indicated by Consumer Reports.

A ProPublica report in the same month alleged that the company’s Smart TVs were into user data collection” via the “Smart Interactive” feature, which is enabled by default in more than 10 million smart TVs that the company sold. Customers would have to manually switch off the feature. The data is also being shared with advertisers, marketers and content producers, added the report. Vizio said in a statement that “non-personal identifiable information may be shared with select partners … to permit these companies to make, for example, better-informed decisions regarding content production, programming and advertising.”

LeEco’s Expansion outside domestic market

Note that the recent acquisition of VIZIO also comes at a time when the Chinese manufacturer is looking to expand outside its domestic market. In India, LeEco plans to invest $10 million to develop cloud infrastructure for delivering content across mobile devices and smart TVs. To supplement this expansion, in January, the company partnered with Eros Now for showcasing ErosNow’s repository of Bollywood films, music and; it also inked a deal with Yupp TV for streaming Yupp TV’s Live TV content on its platform.

In April, LeEco had filed an application with the Foreign Investment Promotion Board (FIPB), seeking approval for opening single brand retail shops and an e-commerce portal in India. However, with the exemption of local sourcing rules by the Indian government last month, branded stores of LeEco might pop-up in India sooner.