Back at the office

Meizu founder returns to challenge Xiaomi

Meizu w

New models on display

Jack Wong is more than just camera-shy. The reclusive founder of Meizu, one of the largest smartphone producers in China, reportedly refused to set foot in his office for years. Instead he ran his company remotely, holding meetings with a handful of key employees. Nor does Wong accept media interviews. If he can help it, he doesn’t leave the house for weeks ­– unless he needs to get a haircut, says Endgadget, a tech blog.

But Wong now seems ready to return to a full time role, and is even making an effort to be a bit more forthcoming.

In early February he resumed the position of chief executive at Meizu, a role he relinquished in 2010. On his first day back Wong started a weibo page declaring that he has “returned to Earth from Mars” and is ready to show the world that “in addition to Xiaomi phones, they can choose the more outstanding Meizu smartphones”.

Then again, the tycoon is someone from whom we should expect surprises.

Wong never finished high school and worked as a chef before moving on to the unrelated career of designing tech gadgets. He became the general manager of Sonken Electronics, a joint venture with a Singaporean firm and manufacturer of MP3 players. After falling out with the management Wong left to start his own company in 2002.

And thus Meizu was born. The company originally made MP3 players too but the popularity of Apple’s iPhone caught Wong’s attention. He changed tack and started making phones in 2006. In WiC83 we noted that Meizu was manufacturing handsets uncannily similar to the iPhone (Apple filed a complaint with China’s State Intellectual Property Office).

Like its CEO, Meizu is notoriously secretive. For years the company hasn’t advertised or done media briefings. Instead it distributes its smartphones through the leading telcos, as well as 600 retail outlets of its own around the country.

Some analysts have speculated that Wong is back at the helm of the Zhuhai-based firm because he wants to boost morale after resignations within senior management. Others reckon that he wants to raise funds and list the company. But judging from Wong’s weibo post, it looks like Xiaomi’s success could be a major motivator. Small wonder, then, that 21CN Business Herald warned Xiaomi’s much more high-profile boss: “Lei Jun, watch out. Your biggest rival has just arrived.”

Xiaomi’s rise has been documented in WiC (we first mentioned the company in August 2011 in issue 119). The Beijing-based company was founded by Lei in 2010, emerging as one of the darlings of China’s consumer technology industry. Recently valued at $10 billion, it sold 18.7 million handsets last year, with the goal of selling 40 million in 2014. Xiaomi has also established its first office outside China in Singapore and says it will start selling in Southeast Asia in the near future.

Lei’s expansion has made Wong nervous. For a start Meizu has yet to surpass Rmb10 billion ($1.63 billion) in annual sales (less than half of Xiaomi’s). Xiaomi was China’s sixth biggest smartphone maker in the fourth quarter last year with a 6% share – just behind Apple’s iPhone, with a 7% share, says IDC. Meizu didn’t make it into the top 10 (its market share was listed under “Others”).

Wong’s first order of business after returning to the CEO’s office was to cut the price for Meizu’s bestselling smartphone, the MX3, from Rmb2,499 to Rmb1,999, the same price point as Xiaomi’s flagship product, the Mi3. Wong also arranged a meeting with Dong Mingzhu, who chairs Gree (also based in Zhuhai), sparking rumours that he is seeking financing from the air-conditioner giant.

But industry observers say it isn’t clear whether Wong’s return can reverse his company’s fortune. “Meizu’s marketing strategy is too conservative. As a result, its brand awareness is not very high and it is now being overshadowed by Xiaomi,” says Tencent Technology.

“The truth is Wong is a technology guy who is very different from Lei Jun. Now that he sees the success of Xiaomi, he wants to copy its marketing strategy. But it is not easy to do. I think if he were to hire professional people to handle the marketing of his company it probably would yield more desirable results,” says the Beijing Morning Post.

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