In recent news, there have been rumors that the Smartisan (Hammer) phone brand might merge with 360 Mobile. However, Lao Luo, the founder of Smartisan, has officially denied these claims. Despite this denial, the reality is that Smartisan is in urgent need of new investors to provide much-needed financial support. Given this situation, a merger between the two companies is not entirely out of the question. Let’s take a closer look at what’s really going on.
Lao Luo has refuted the rumor of a collaboration with 360, but the fact remains that Smartisan is struggling financially and needs fresh capital. The company's journey in the smartphone market hasn't been smooth. Although the Nut Pro 2 launched last year showed some positive signs, Smartisan's overall performance has been underwhelming. In 2017, its smartphone shipments were estimated to be around 4 million units, which is significantly lower than industry leaders.
Smartisan has been around for over five years, yet its growth has been slower compared to competitors like Xiaomi, which reached the top four domestic brands within just three years. This slow development has made it difficult to attract investor interest, leading to ongoing financing challenges. The RMB 1 billion funding from the Chengdu government last year was the largest round of financing Smartisan has received so far. In contrast, Xiaomi had already raised nearly $2 billion by 2014. Clearly, Smartisan's financial struggles are a major obstacle to its growth.
The Chinese smartphone market has become increasingly competitive and challenging. In the fourth quarter of 2017, the market saw a double-digit decline, marking the first such drop in many years. This downturn has made it even harder for smaller players like Smartisan to survive. The market is now dominated by giants such as Huawei, OPPO, vivo, Xiaomi, and Apple, which together hold over 80% of the market share. For Smartisan, the pressure is immense.
Given this environment, Smartisan urgently needs new investors to fuel its growth and capitalize on the momentum from the Nut Pro 2. However, after the failed ventures of LeTV, many investment institutions have become more cautious about entering the smartphone sector. Finding new funding sources is proving to be a tough challenge for the company.
On the other hand, 360 once had ambitions in the smartphone space. When Xiaomi rose to prominence, 360 launched a special offer device, but it didn’t quite work out. Later, they partnered with Coolpad to enter the market directly, but their efforts were inconsistent and ultimately unsuccessful. Over time, 360 lost momentum in the smartphone industry, and its ambitions in this area have faded.
Despite this, 360 has successfully listed on the domestic stock exchange and holds a significant amount of cash. Its primary focus is now on internet services, making a hardware-focused merger with Smartisan a strategic move. For Smartisan, this could mean access to much-needed financial backing, while 360 could benefit from expanding its ecosystem through hardware integration.
Therefore, even though Lao Luo has denied the merger rumors, the possibility still exists. It's possible that the final decision may not rest entirely with him, as the influence of major investors can’t be ignored. In many cases, business mergers are driven by the interests of the investors rather than the founders themselves. This is the reality that many entrepreneurs face when they accept outside capital.
In conclusion, although the merger between Smartisan and 360 hasn't been confirmed, the financial and strategic reasons make it a plausible scenario. If you want to stay updated on the latest developments, be sure to follow eeworld for comprehensive and up-to-date information on the tech industry.
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