The new company, called Hubei Xingji Shidai Technology, signed an agreement with the Wuhan Economic and Technology Development Zone to establish its headquarters in the central Chinese city, where it will develop smart devices including smartphones.
“There is a close connection in technologies within intelligent vehicle cockpits and smartphone software technologies,” said Li Shufu, chairman of Geely Holding in a statement.
“The major trend in the coming future is to create user ecosystems across borders and provide users with a more convenient, smarter, and seamlessly connected multi-screen experiences.”
Officials from Hubei Xingji Shidai Technology and Wuhan Economic and Technology Development Zone sign an agreement for a smartphone venture in Wuhan on Tuesday. Photo: Weibo
Xinji Shidai aims to position itself in the premium segment of the smartphone market, leveraging on “Geely’s extensive experience in design, research and development, high-end smart manufacturing, industrial chain integration, vehicle intelligence, software development, and global infrastructure,” the company said.
The Hangzhou-based carmaker’s move into the extremely competitive smartphone sector is an anomaly. While carmakers have stayed away from tech devices, mainland Chinese tech giants such as Baidu, Tencent and Alibaba have diversified into the EV sector.
Geely’s foray into the smartphone market as part of its push to create a new ecosystem was a logical development path as large corporations have taken similar approaches in the past, said Stanley Chan, director of research at Emperor Securities, pointing to smartphone giant Xiaomi’s electric vehicle venture announced in March.
Xiaomi kicked off its electric car project with an initial investment of US$1.5 billion, and expects to spend up to US$10 billion on its venture over the next 10 years. Company founder Lei Jun described EVs as a “natural choice” for the Chinese gadget maker to expand its so-called artificial intelligence of things ecosystem.
However, Chan said the new smartphone company launched by Geely’s chairman would face great challenges.
“It won’t be easy [for Geely], in terms of both the competition and creating a new brand to enter the market,” said Chan.
“There is fierce competition in the smartphone markets in China as well as globally, especially for high-end devices.”
The development of mobile devices, satellites, and aeromobility are all part of the group’s transformation programmes, the company said.
Separately, Geely said on Monday that it produced its first satellites at the company’s new satellite production and testing centre in Taizhou in the eastern coastal province of Zhejiang. The owner of Volvo Cars announced in March last year that it would start building satellites, betting they would give the company an edge in the driverless car industry and provide more accurate navigation systems.
Earlier in May, the Chinese carmaker formed a venture with German “urban air mobility” developer Volocopter, setting the stage for the launch of air taxis in China. Geely had previously led a US$94 million investment round in the company in 2019.Internet Explorer Channel Network