“India is one of the most strategic markets for LeEco and hence does not have any exit plan. In the past one year, LeEco India has gained market recognition and the initial stage of market seeding has been successful,” the company said in a statement. Earlier in the day, it was gleaned from a senior inside source that the company has fired 85 per cent of its India staff. The source also confirmed that both Atul Jain, Chief Operating Officer, Smart Electronics Busi ness, and Debashish Ghosh, Chief Operating Officer for Internet Applications, Services and Content, were “asked to leave” and had not quit as reported.
The resource head count in India, however, is well aligned to the scale of operations envisioned and in line with industry benchmarks. “In fact, the company is gearing up for the launch of its next-generation TV scheduled the coming week. Premium models of smartphones too are to follow. LeEco television and smartphone business continues in India and has gained significant market recognition. All this certainly does not signal a company in wind-up mode,” the statement read.
“LeEco, as the name suggests, was built on the premise of an ecosystem. The device would open a user to an ecosystem and it was not just a smartphone. However, for a country like India, and even for many countries globally, this ecosystem isn’t ready yet. Paid content consumption hasn’t become big enough for a company to survive while earning nothing on the device itself,” Faisal Kawoosa, Principal Analyst, Telecoms, CyberMedia Research (CMR), said.
“LeEco came in to disrupt this business model and make the secondary streams of earnings as their primary. For that to happen, the ecosystem hasn’t arrived yet. So their positioning as well as proposition went wrong. It dismayed a user to see nothing extraordinary in terms of device and strategy,” Kawoosa added.