LeTV, the Chinese Android TV maker, recently launched updated editions of two models and sharply lowered prices. LeTV claims the prices can merely cover bills of materials and won’t expect to make profits from hardware any longer.
It’s unknown whether it has something to do with the rumor that Qihoo 360, one of the largest Chinese Internet companies, has invested in LeTV, for Zhou Hongyi, CEO of the company, always touts his building-user-base-through-free-services-and-then-monetizing-it-in-other-ways strategy and once said smart hardware makers should follow this strategy too.
With updated specs, the new S40, named S40 Air, is priced 999 yuan (about $160), 50% lower than the original one that was launched a little more than one year ago. The price point must remind many of the movement in China since sometime around 2011 that Android smartphone makers worked hard to make smartphones sold at around or lower 1000 yuan so that most Chinese would afford a one. The LeTV move seems to show that the cost for an average spec Android TV can be low enough that 1000-yuan smart TV movement is around the corner.
The prices for the updated 50-inch S50, with the first model launched last October, were lowered 20% for the 2D edition and 16% for the 3D edition, respectively. The two now are priced the same as the launch prices for the latest Xiaomi Android smartphones.
Although it claims there’ll be no profit in the two models, LeTV still charges an annual content subscription fee, RMB499 (about $80) — including the 999 yuan S40 Air. It’s actually the only smart TV maker in China that does so. Or it’s because it’s the only one that owns an online video site and a plenty of content rights.
Consumers should pay for two-year subscriptions when buying any LeTV . Since the very first LeTV model has been around for a little more than one year, it’s unknown whether consumers would like to pay for more years or buy a new one with higher specs or priced even lower considering the fast tech advancement. To make long-term money, LeTV has to either lower the annual fee or keep users buy new smart TVs from LeTV.
Of course LeTV has many other ways to make money as it also owns the online video site, video rights bought in the past years, movie/video production company, among others.
Both S40 Air and S50 Air launched a celebrity edition that charges several hundred yuan higher. The S40 Air one offers contents from a Chinese best-selling writer and movie director and the S50 Air one includes contents related to soccer star Cristiano Ronaldo. See, many more ways to make money.