What happened: In response to reports that smartphone brand Smartisan is suffering from cash flow problems, leading to issues paying salaries as well as plans to layoff as many as 60% of workers, a representative told Securities Daily, “The company really is in a crunch, but please give Smartisan time.” The company’s charismatic leader, Luo Yonghao, has also threatened to sue over rumors that he suffers from depression, which some view as a potential weakness in the company.
Why it’s important: An analyst quoted in the report says that Smartisan has been ahead of the curve in terms of its product, but also out of touch with the market. That seems to sum up the general tone of media reports on Luo Yonghao and the company he founded, which vacillate between applauding his vision and poking holes in his business model. Smartisan previously made waves with Bullet Messenger, which was marketed as an alternative to WeChat and topped China’s iOS App Store chart for nine days after it launched. Daily downloads have dropped significantly since then, however, seeming to confirm that Smartisan must follow up on its promises with performance.