|China Wireless Technologies Limited|
|Traded as||SEHK: 2369|
Number of employees
|Coolpad Group Limited|
Coolpad Group Limited is a Chinese telecommunications equipment company headquartered in Shenzhen, Guangdong. It is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange as SEHK: 2369. It is a large smartphone company in China and the largest Chinese domestic brand by sales outside of China. Since acquired by Jia Yueting, it was part of LeEco Group, but not under the group mainland's parent company Leshi Holding.
- 1 History
- 2 Operations
- 3 Corporate Affairs
- 4 Products
- 5 Global presence
- 6 Controversies and Challenges
- 7 Ownership
- 8 Official Website Links
- 9 References
The Coolpad group is most notable for their invention of the dual-mode and dual-standby handsets, and for their affordable smartphones from entry-level to high-end. According to the recent IDC research, Coolpad is the third largest smartphone manufacturer in China in terms of market share – behind Lenovo and Xiaomi.
Coolpad Group Limited was first incorporated as a limited liability company in June of 2002, but it first listed shares of the company on the Hong Kong Stock Exchange on December 9, 2004. Coolpad’s current business structure is an outgrowth of Yulong Computer Telecommunications Scientific Co., Ltd., now a wholly owned indirect subsidiary of Coolpad, and the source for much of its research and development.
Currently, Coolpad is attempting two simultaneous brand “pushes”. First, Coolpad seeks to gain a greater market share within China through direct sales to consumers. Secondly, Coolpad wants to take its partnership model overseas, building better relationships with carriers like MetroPCS, Orange, and Ting, and offering mid-tier and budget smartphones on behalf of those companies.
Yulong Scientific Telecommunications and Computers was founded in April of 1993. Yulong is a wholly owned subsidiary of Coolpad Group Limited (HKG: 2369). Yulong is the primary distributor for the “Coolpad” brand of mobile device, with presence in multiple countries and regions.
Yulong is a Chinese company that specializes in smart phone production, mobile data systems, and value-added business products such as device management. Currently, Yulong is focusing on smart phones as the core of their wireless data integration initiative – and they are committed to becoming a leader of international 4G technology. Yulong currently employs more than 5,000 people, including 3,000 R&D personnel, and they hold numerous patents to ensure a strong presence in a global technology market that is dominated by large foreign firms.
Within China, Yulong has won several awards as an outstanding software/hardware enterprise. Yulong is listed in the 500 fastest growing high-tech companies in the Asia Pacific Region, the China Technology Fast 50, and the top 50 high-tech enterprises in China. Yulong Communications was the first major technology company within China to utilize international management consultants and enterprise resource planning, increasing manufacturing and research efficiency. Yulong has passed the ISO9001:2000 quality management certification as well as the ISO14001:2004 environmental management system certification, one of the few Chinese companies to do so.
In the modern era, with technology shifting to cloud integration and BYOD business environments, Yulong Communications is committed to providing customers with an improved slate of products including personalized smart phones, rich user experience, and blazing fast processing speed. By partnering with other firms, including China Telecom, Qualcomm, NVIDIA, Broacom, and others, Yulong Communications aims to accelerate adoption of its innovative 4G technology while penetrating markets that would otherwise be inaccessible to a mid-sized Chinese technology company.
2007 – The Ministry of Telecommunications and the National Development and Reform Commission issued Yulong TD-SCDMA mobile phone licenses. Yulong Communications started out as the lead provider of the mobile industry's best terminal solutions and technology for nearly twenty industries including the aviation industry, government, and commercial sector.
2008 to 2010 – Coolpad Group Limited won the second prize for Chinese scientific and technological achievement for their efforts to bring Chinese mobile devices into the 3G era. Coolpad also began development on the Android operating system, releasing a landmark Android phone called the Coolpad N900.
2011 to 2012 – Coolpad continued to invest in smart phone technology and development throughout 2011 and 2012, with the core of its business shifting to Beijing, Nainjing, and the United States to form research hubs through which new innovations could be produced. Coolpad solidified partnerships with its fiftieth international headquarters during this era, with a broad network of dealers that supported the launch of flagship products like Coolpad 9900, 9960, and the CoolCloud cloud storage system.
2012 – While Coolpad's domestic market penetration remained high (third place in 3G usage and technology) the company shifted its overall device strategy from high-end luxury phones to mass-market phones to reach broader appeal both within China and internationally. Successful cooperation with European and American carriers allowed Coolpad to introduce products into both markets, and Coolpad exported variants of mass market phones to buyers in India and Asia Pacific
2013 – Yulong Communication's Shenzen City headquarters won the first prize for scientific and technological progress and the Shenzen Mayor Quality Award, the first 4G company to do so. As the first major 4G LTE company in China, Yulong Coolpad Mobile Phones made up all eight of the top eight phones in the country at this time.
2014 – The future of Coolpad's domestic and international expansion will see continued partnerships with international firms and major carriers, the production of smartphones that fit the demographic needs of each country they are exported to, and a realization of Coolpad's goal to put a 4G phone in the hands of every mobile user in the world.
2015 – Coolpad started its global expansion and held events in Indonesia, Vietnam, India and Czech separately entering these markets with its brand name “Coolpad”. Till now, Coolpad has entered into 21 countries in Europe, Vietnam, Indonesia, India and the United States.
In December 2016, Coolpad Group sold 80% stake of Shenzhen Coolpad Mobile Tech (Chinese: 深圳市酷派移动科技), which runs the brand "ivvi", to SuperD. Coolpad Group retained 20% stake in Coolpad Mobile.
Sale in China
Coolpad does the vast majority of its operations within China, and it has captured a substantial portion of the market there. Many of Coolpad’s phones have historically been exclusive to China, and Coolpad has relied on the cooperation of China Mobile and the other Chinese telecommunications companies to subsidize phone prices for subscribers and to encourage greater utilization of smartphones (as opposed to the cheaper feature phones that used to make up the majority of the phone market in China) for the growing Chinese market.
China Mobile recently announced that it would no longer be subsidizing the cost of smartphones sold through its partner manufacturers, a decision that could potentially impact the margins of all the main OEMs and could lead to Coolpad actually losing money on phones sold through this carrier. According to SCMP, it is likely that Coolpad will refocus on unlocked market since the long-term feasibility of selling low-end smartphones at a loss through the carrier is unsustainable.
Within China, carriers account for more than 70 percent of all smartphones sold – so Coolpad has historically used its close relationship with Chinese carriers to push its smartphones within the country. Of the 330.8 million smartphones that were sold in China in 2013, Coolpad accounts for around 11 percent of them – just behind Lenovo’s 12 percent. According to Hong Kong analyst Yuji Fung, “The best strategy for Coolpad is to strengthen its cooperation relationship with local telecom operators to ride on the 4G handset boom this year, and to penetrate into open market via the e-commerce channel.” 
MetroPCS is a wholly owned subsidiary of T-Mobile, the fourth largest cellphone carrier in the United States. MetroPCS uses the T-Mobile networks – including T-Mobile’s relatively new 4G LTE network, but it offers a no-contract package that is designed for low data users and basic cellphone needs. As such, Coolpad sees MetroPCS as a great partner for its phones in the United States, including the flagship Coolpad Quattro 4G for only $150.
According to the Jakarta Post, Coolpad is launching a $100 smartphone in Indonesia to take advantage of the 40%+ year over year growth in the Indonesian smartphone market. Coolpad will start in Indonesia with the Andromax G2, and the carrier Smartfren expects to sell up to 200,000 of the phones in this quarter.
In 2014, Coolpad announced that it would become one of the first smartphone manufacturers in China to begin offering its phones through online portals directly to consumers. Some other Chinese manufacturers, notably HTC and Lenovo, offer direct sales through secondary brands – and Chairman Guo Deying of Coolpad claims that the move to retail sales will help the company continue to turn a profit despite declining margins on hardware and increased competition in the 4G smartphone sector. According to Forbes, a move towards online sales could pay off in the long term – but in the short term, online sales require a great deal of marketing, driving the profit margin for online sales below Coolpad’s average of 14-16% for 4G phones sold through other channels. The second largest smartphone manufacturer in China, Xiaomi, already makes 70% of its sales through online channels.
Coolpad’s foray into direct sales will start with a $1.6 billion sales agreement through JD.com, the second-largest e-commerce platform in China. This will also allow Coolpad to offer pre-sales of its development models, something that was first tried with a 1,600 unit presale on the China Unicom “Coolpad F1”. Depending on the success of the online-sales initiative, Coolpad is poised to pass Lenovo to become the second largest smartphone maker in China by early 2015. Coolpad sold only 50,000 units online throughout 2013, but aims to sell at least 20 million units online in 2014 – a dramatic departure from its previous reliance on partners like China Mobile Ltd. to push revenue growth and expansion within China.
The Board of Directors of Coolpad Group is composed of Executive Directors Jia Yueting (Chairman), Jiang Chao (Vice-chairman), Liu Jiangfeng (Chief Executive Officer), Liu Hong, Abulikemu Abulimiti and Zhang Wei, as well as Independent Non-Executive Directors Huang Dazhan, Xie Weixin and Chan King Chung.
Coolpad has positioned itself cost-effective smartphone manufacturer in China, it has a range of products from entry level to high-end to serve diverse demographics. . In the low-end sector, Coolpad targets first-time smartphone users with phones that are subsidized by carriers or cheap enough to buy outright, encouraging them to buy more expensive (and more feature-rich) smartphones after they have a good user experience with some of Coolpad’s entry level models. This is why Coolpad is willing to sell low-end smartphones at a loss through some carriers, and why Coolpad spends such a high proportion of its marketing budget outside of the main developed cities of China where smartphone penetration is only around 50%.
According to the current president of Coolpad, Chinese expansion will continue to be the main goal of Coolpad even as international growth continues – since the Chinese market is still far from saturated. “We are ready for the next explosive high-growth opportunity in China. The Chinese government is expected to issue the high-speed fourth-generation mobile technology licenses to local carriers by the end of this year. We will launch 4G smartphones with Chinese carriers quickly to ride on the next wave of mobile technology.”  With the focus on domestic expansion underpinning the overall strategy, Coolpad expects to double its smartphone shipment rate to 80 million by 2015.
Coolpad was the first company to develop a 4G smartphone in China, and it is still ranked as the No.1 4G smartphone seller in the country. In 2014 alone, Coolpad developed more than 15 products for the 4G market in China, and it expects to roll out another 15 before the end of the year. Some of these phones, like the 8720L, have been massive critical successes and have greatly expanded Coolpad’s market share in the 4G sector to beyond that of Apple. While the Apple 5S is still the single widest selling 4G phone, Coolpad’s larger ecosystem of 4G phones allow it to capture greater market share since there are phones at all different price points. There have been more than 10 million 4G phones sold by Coolpad so far – and Coolpad plans to continue its dominance of the LTE smartphone sector even as the Chinese telecoms continue to expand their networks.
Coolpad Group Ltd is listed on the HKG exchange as stock code 2369. The year on year performance of Cooplad Group Ltd. has been mostly positive, with revenue growth of 36% or more during each year since 2009. Currently, Coolpad’s gross margin is 13.25% and its net profit margin is 2.20%. Of the 28 investment analysts polled by the Financial Times on October 21, 2014, the consensus forecast for Cooplad Group is “hold”.
The future of Coolpad, as a competitive entity, is going to be tied to the future of the Chinese 4G market. While Coolpad was the earliest adopter of the 4G LTE technology inside its smartphones, it has lost the exclusivity in the market as the Chinese 4G network has continued to develop. On the one hand, increased penetration of 4G into China has increased market demand for the 4G phones. The rate of growth in the 4G handset industry has not matched the rate of entry of new firms into the competitive arena. According to DigiTimes, a leading source for 4G industry news, Coolpad is not expected to make its 2014 sales target, but neither are any of the other major Chinese manufacturers. DigiTimes claims, “China-based CoolPad, which turned all its smartphone product lines to support 4G in the first half, accumulated a large excess inventory of 4G smartphones in the channel from January-April. Since its sales in the third quarter remained weak, the vendor’s orders to its upstream supply chain were greatly reduced for the quarter.” If Coolpad doesn’t meet its optimistic growth targets for 2014, it may have over-estimated the rate at which the domestic 4G industry in China would grow – and the amount that local manufacturers would have to compete against international manufacturers like Apple and Samsung.
While Coolpad has seen increasing revenue in every one of its operating quarters, it has also struggled to maintain margins on hardware products – especially in the face of increasing global competition from firms like Samsung, Lenovo, and Apple. Recently, Coolpad cut nearly 10 percent of its workforce in an attempt to streamline operations – likely because of the declining sales after China Mobile made the decision to stop subsidizing the price of smartphones to mobile subscribers. The price wars in the low-end segment of the smartphone market mean that most smartphone manufacturers have actually been losing money on the “value” segment of their product offerings – hoping instead to build brand equity by increasing their user base.
Positioning Within China
Wall Street Analysts consider China one of the largest growth markets in the world for smartphones, even after one considers the fact that smartphone manufacturers in China produce more smartphones than any other nation. This is partly due to the large population of China, and the low penetration of smartphones, but also because China is gradually rolling out 4G technologies to its 1.27 billion wireless phone subscribers, mostly through the largest telecom in China: China Mobile. According to one analyst report, the total number of mobile phone subscribers in China will reach 2.4 billion by 2020 – with a substantial percentage using either 3G or 4G to access the internet and streaming content through their phones. While feature phones will remain a portion of the market, the low-end smartphones offered by manufacturers like Coolpad are designed to “hook” feature phone users on the features of smartphones before gradually upselling them to the flagship models and mid-tier phones. This is in stark contrast to the strategy used by Apple, which has cultivated extremely high demand among the luxury subset of consumers and has signed exclusive partnerships with limited carrier subsidy – yet has still sold millions of smartphones.
Coolpad’s focus is on medium footprint (from 4”-6”) smartphones that utilize the growing 3G and 4G networks in China and abroad. As such, the majority of Coolpad’s smartphones are designed for media browsing and consumption rather than strictly for phone calls. Coolpad phones are divided into two basic categories – phones that are exported through Coolpad’s international partner network, and phones that are exclusive to Chinese carriers like China Telecom.
A 4.5” smartphone with a 450x960 display and a Qualcomm Snapdragon 200 MSM8625Q processor. Introduced for the Chinese market, and rapidly gained traction among the budget end of the smartphone sector. Combined low price with the advanced features of Android 4.1 Jelly Bean – although had a relatively low pixel density compared to higher tier phones released in the same year.
The Coolpad 7268 is a quad-core smartphone that was released in 2013 for the export market. While the phone’s specs were average for the time of its release, the phone was priced very low – and it received great reviews from websites like Cnet. Coolpad was the first smartphone company to regularly offer dual-network standby phones as standard in their lineup.
Great God F2
One of Coolpad’s highest quality phones is the Great God F2, a phone that was designed specifically to compete with the Redmi Note and other low-cost feature-rich phones. The Great God F2 rivals the feature set of the Redmi Note, including an HD screen, an 8 core CPU, and a 13 mega-pixel camera. Despite the impressive features, and the ability to use the new LTE network, it costs only 999 CNY ($160 USD). The Great God F2 comes after increasing competition in the high-end segment of the Chinese smartphone market has led to drastic price cuts by the major manufacturers – and each manufacturer continues to add their own features to the phones to make them more appealing to the growing Chinese middle class. For example, Coolpad developed a high-gain antennae specifically for the Great God F2 that they claim will increase reception by 30%.
Coolpad Grand 5
The Grand 5 is one of the newest Coolpad smartphones, aimed at the high-end market and at the growing segment of the population that uses their smartphone primarily as a camera and a tool to share photos and videos on social networks and to their contacts. The Coolpad Grand 5 will contain a 20 mega-pixel camera that uses a Sony Sensor IMX220 lens, allowing the lens to revolve through 270 degrees for panoramas and large angle shots. The rear case of the Grand 5 will be made of Kevlar, and the smartphone will ship with high pixel density on a full HD 5.98 inch display and an expandable drive thanks to the Micro SD slot. Like the rest of Coolpad’s high-end lineup, the phone will support dual SIM use, and it will run the latest Android operating system alongside Coolpad’s own UI improvements.
With camera quality increasing across the board in the smartphone industry, Coolpad has announced its first 3D-camera smartphone, coming hot on the tail of popular 3D-camera phones like the Evo 3D and the Amazon Fire. Coolpad announced its 3D smartphone in 2014, and the Watch China Times suggests that the “N-series model” with the 3D camera will come out before Chinese New Year. The new 3D-camera product will cost around $245, like the high-end Coolpad F1, and it will contain dual-lens rear cameras to add depth to pictures. According to reports from the China Digital Entertainment Expo and Conference in Shanghai, Coolpad plans to focus on the growing gaming segment in China – so future high-end smartphones will likely include other features that develop this market – including a more stylish approach to the N-series UI.
In 2013, Coolpad partnered with China Telecom to produce an ultra-high-end smartphone called the MagView4 that was integrated with a smartwatch and a health date meter. While fitness trackers and health data aggregation hasn’t yet taken off in China, this positions Coolpad to be among the first domestic smartphone manufacturers producing something in this area. The devices integrate with Coolpad’s cloud offerings – and they also provide higher security than previous phones. The MagView 4 was one of the first smartphones by Coolpad to be certified by the Chinese government for military and official use for encrypted communications.
In 2015, Coolpad launched its annual flagship mobile—Coolpad MAX. Coolpad MAX is the first mobile phone which has two separated systems in it. One of the systems is called “open system”, and another one is called “private system”. In open system, it is a normal phone. However, in private system, one can put all his/her private documents in it which need to be unlocked by his/her fingerprint or passwords.
- In 2012, Coolpad entered the US mobile phone market with its first 4G LTE smartphone, cooperating with MetroPCS.
- In 2015, Coolpad was listed on the Forbes Asia TOP 50.
- In June 2015, Coolpad launched three products in Southeast Asia (Indonesia and Vietnam).
- In September 2015, Coolpad entered 10 countries in Eastern Europe.
Controversies and Challenges
Coolpad originally planned on using a gold-colored metal casing for its highest-end smartphone in China, but it shelved that idea in favor of a more muted silver casing after Chinese officials said that the color gold might be seen as overly “flashy” in the midst of the Chinese government’s larger push towards discouraging graft and rooting out corruption. In China, the color gold symbolizes wealth – with gold phones like the iPhone 5S being particularly prized.
While smartphone demand in China has increased steadily in the last several years, demand has begun to slow just as the market sees increased competition from multiple manufacturers. As a direct result of the slowing demand, many cellular network companies in China have decided to cease their practice of subsidizing smartphones (a tactic used to upsell consumers on contracts and data usage) – a decision that could immediately impact Coolpad’s sales and inventory. Following the removal of the subsidy agreements, Coolpad will split its distribution into three different brands, providing phones that the carriers can sell through their own channels, phones for regular channels, and phones that will be sold directly to consumers. On the other hand, some analysts believe that part of the slowed growth in Chinese mobile sales have been due to the anticipation of the iPhone 6 launch in China, and that any delay in the iPhone 6 launch could actually bolster sales of competing platforms.
In 2015 Jia Yueting became the second largest shareholder in the company with 17.92% shares as at 31 December 2015 (via Leview Mobile HK (Chinese: 樂風移動香港), an indirect subsidiary of Cayman Islands-incorporated Lele Holding; Jia owned 100% stake of Lele Holding). In August 2016, Leview Mobile HK purchased an additional 10.97% shares from the founder and former largest shareholder Guo Deying (Chinese: 郭德英), making Lele Holding the largest shareholder for 28.83% shares. After the sale, Guo still owned about 9.21% shares as the second largest shareholder.
Official Website Links
- Global: www.coolpad.com
- Hong Kong Companies Registry
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In the third quarter of last year, Coolpad, the smartphone brand of China's Yulong Computer Telecommunication Scientific (Shenzhen) Co., was the sixth-biggest smartphone vendor by units sold world-wide
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