Product ecosystems are powerful brand agents. Put more simply, you are hooked on Apple, Google, and Amazon because they provide a unified, productive experience that keeps improving.
Yet, as wildly successful as they are, each of these ecosystems lack a truly consistent interface that smoothly handshakes among home, car, and personal devices. Apple and Google are working on making cars part of their vision; Tesla is starting with cars and headed for Apple and Google territory on the way to building up its own unique ecosystem. Now a fresh disrupter has entered the scene. LeEco, a company that until recently was known only as China’s Netflix, is slated to introduce a connected network of phones, smart TVs, autonomous cars, and more. Its partnership with EV startup Faraday Future—and Aston Martin—means there may be something to that plan.
It starts with the LeEco LeSee Pro concept, which made its U.S. debut in San Francisco this week. It is an evolution of the concept by the same name shown last year at the Auto China show in Beijing. LeEco chairman Jia Yueting’s presentation was sorely lacking any concrete details, and LeEco wouldn’t confirm any of this concept’s specs or the level of autonomous driving the company is anticipating to enable. However, this coupelike sedan has received some cosmetic nips and tucks in the months since the Beijing show, and some instrument-panel tweaks show that the interface is taking form.
Plans Include Faraday Future and Some Very Aggressive Pricing
LeEco, now with dual headquarters in China and San Jose, California, has a partnership with Faraday Future, the new California-based electric-car company that LeEco has helped fund, and with Aston Martin to help develop an all-electric model for the British sports-car maker. While the LeSee Pro teases a model to be built in China, for that market, Faraday is expected to build a future successor or version at a $1 billion Nevada plant; and the relationship goes both ways as it will use some degree of the LeEco’s open-content technology.
Faraday Future, Jia revealed, will be showing its first production-ready electric vehicle at the CES technology show in January, with an on-sale date as early as the following January. Faraday’s first vehicle, a family-size crossover that has been spied in testing, is expected to be more oriented toward the luxury experience and marketed to those who wish to drive themselves, but the cars are also anticipated to be capable of autonomous operation.
LeEco’s Plan: Undercut on Price and Gain a Strong User Base
The kind of pricing that gets people’s attention is part of LeEco’s strategy at every hardware level, unlike Apple, which still depends on making money from its high-margin hardware business. LeEco chairman Yueting has gone so far as to say that he hopes the brand’s cars will eventually be free, because the company’s revenue model relies on content and services—and the more users, the merrier. Its pricing for its latest smartphones dramatically undercut prices for the Apple iPhone, for instance. Although it’s hard to imagine how the revenue from streaming video, apps, and telematics services would ever offset the billions to be spent developing and building an autonomous car.
The company’s smart-TV business launched in 2013, and this past year it was already the top-selling TV maker in the China market. With the company’s purchase of Vizio this past year, it’s gained a foothold in this lucrative market in the United States as well. Expect some great displays and screens in these vehicles, as well as turnkey entertainment options that don’t require multiple subscriptions.
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Just as LeEco said that its iPhone rival isn’t a smartphone but “a device for a new generation of entertainment,” it says the LeEco LeSee Pro isn’t an electric car but “an ecosystem for the new era of connected mobility.”
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LeEco has been stepping into the role of content producer in the style of Netflix. In China, LeEco has bankrolled original TV series and the upcoming Matt Damon movie The Great Wall—one of 20 big-budget English-language movies in the works. Globally, it also owns the digital rights to more than 300 sporting events and more than 10,000 games and matches, and it has enlisted Cisco Systems as a core partner in developing its proprietary digital rights-management (DRM) software.
More Than Taking Your Device Along: It Is the Device
The heart of the LeEco ecosystem is making sure that everything works—and works the same—across the platform and into vehicles. That will be a tremendous leap from today’s Apple CarPlay and Android Auto interfaces, which are already feeling like stopgap solutions. Just as the company said that its iPhone rival isn’t a smartphone but “a device for a new generation of entertainment,” the company says that the LeEco LeSee Pro isn’t an electric car but “an ecosystem for the new era of connected mobility.”
The vehicle’s reveal involved some hiccups, such as the story of an accident with one of the LeEco Pro prototypes, and a fixed vehicle that made it to the venue too late to be driven (or drive itself) onto the stage. But the company also confirmed, with a clip for the conference from Michael Bay, that the LeEco Pro will be featured in Transformers 5, currently being filmed in the U.K.
Sharing is another part of the plan; the company is working on a module that will anchor an “ownership sharing platform,” with a dynamic interface that will let a pool of drivers jointly use a single vehicle.
As driving tasks become increasingly automated, the quality of the interface and the user environment will take center stage in the vehicle experience. The seamlessness of the connection among devices will start to become a strong factor in what distinguishes one vehicle from another—which may give LeEco an advantage, if its partners can pitch in with some of the traditional vehicle development of what the company seems to see as just another device. At the very least, it’s definitely a company worth watching.
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