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Qihoo re-enters handset market with Coolpad deal

By noreply@blogger.com (InfoseekChina)

Qihoo 360 Technology’s recent tie-up with handset maker Coolpad indicates the internet security firm’s plan to secure a portal position in the mobile internet market, the Chinese-language Economic Observer reports.

Qihoo 360 announced the partnership with Coolpad on Dec. 16, under which the internet security firm will invest US$409 million for a 45% stake in a joint venture to be set up with Coolpad’s Dazen unit.

Dazen, which was set up in early 2014 as a handset brand targeting the online market, will be in charge of the design and production of hardware, while Qihoo 360 will be responsible for areas involving user experience, according to Dazen president Zhu Fanghao.

This is the second time Qihoo 360 has sought to enter the handset sector, following failed talks to forge a partnership with Huawei in 2012, the newspaper said. Qihoo 360 launched customized products with other handset makers after negotiations with Huawei but operations never took off.

Despite the setbacks, Qihoo 360 chairman and CEO Zhou Hongyi has not given up on handsets and hardware, citing the example of online retailer Amazon’s tablet and smartphone products.

In August, Zhou said that although Qihoo 360 has managed to carve out a market niche for PCs, the same model cannot be replicated for handsets, forcing his company to explore new possibilities for mobile phone products.

Zhang Kai, president of consulting firm Zdology, said Qihoo 360 needs to quickly shift from a PC-centered business model, which has been losing ground to the mobile internet, with its top priority being securing a portal. “At the moment, Qihoo 360’s plan is to develop a portal focused on mobile devices,” Zhang said.

Zhou said Coolpad’s new partnership with Qihoo will not affect existing deals with other internet companies, including one with online retailer Jingdong Mall, which holds exclusive rights to Dazen phones.

Zhou said Dazen is a profitable brand, valued at US$1 billion, and forecast that the brand’s total sales will surpass 10 million units in 2015, including 3.5 million from offline retailers.

Source: Want China Times

Source:: Qihoo re-enters handset market with Coolpad deal

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