NOVEMBER 2016 FORBES ASIA | 17THE LONG AND WINDING road to
Meizu headquarters from the port of
Jiuzhou in Southern China is a surpris-
ingly beautiful one. Flanked by trees and
quaint side streets on the left and the sea
on the right, the ride feels more like a
drive from Los Angeles to Santa Barbara
than a trip to a Chinese phone company.
Unlike most of its peers, which are based
either in the flourishing and futuristic but
cold and sterile Shenzhen High-Tech In-
dustrial Development Zone or the dusty
industrial town Dongguan, Meizu Technology Co. operates out of the
seaside town of Zhuhai.
That’s where the company has been since its founding in 2003, when
high school dropout Jack Wong, after years of factory work in the elec-
tronics business, started Meizu to manufacture portable music players.
The company’s line of MP3/MP4 players was an instant hit, allowing the
company to grow without outside funding during its first decade. In 2008
Meizu shifted gears to venture into the smartphone industry.
Today Meizu is the 11th-best-selling smartphone maker in the world
(ahead of names like Sony and Microsoft), having sold over 20 million
phones in 2015, according to the research firm IC Insights, and it’s on
pace for 25 million this year. That may seem low compared with numbers
from Apple, Samsung and Huawei, but Meizu’s 2015 sales represent a
350% jump over the previous year, and the fact that the company didn’t
seek funding until recently—it received a $590 million investment from
e-commerce giant Alibaba last year—makes that growth noteworthy.
Meizu isn’t banking on posting another triple-digit sales increase
anytime soon, because the company’s top people are well aware that the
smartphone market is saturated in many parts of the world. So what’s
next? I visited Meizu to find out who they are, how they work and what
their plans are for the future.
“This year we have been thinking about changes that we need to make,
because there’s probably going to be a [smartphone] market slowdown
coming in the next two years,” says Li Nan, Meizu’s vice president of
marketing and sales. These changes, Li adds, include transitioning Meizu
from a hardware company into a mobile Internet company. This explains
Meizu’s dedication to developing its own software, the Flyme operating
system. It’s still an Android skin, but it’s diferent from that of some other
phone makers in that it’s developed in the same building (down the street
from Meizu headquarters) where the phones are manufactured.
“The hardware and software teams work closely together,” says Ard
Boudeling, Meizu’s global branding manager, who joined the company in- “That allows us to develop features like mBack.” Boudeling is refer-
ring to the innovative feature of Meizu phones
that essentially eliminates the need for a dedi-
cated back button. It’s a clever OS element that
changes how users navigate within Android.
Meizu’s phones are well reviewed, and
Nick Xu, founder of the independent Chinese
marketing agency Beeep, tells me consumers in
China generally consider Meizu a good brand.
But as the online smartphone market becomes
more saturated, smartphone companies are
finding it increasingly diicult to make profits
from online sales. “I think Meizu has to grow
its o
ine sales channel,” Xu says. “That’s how
Oppo and Gionee grew so fast.”
Meizu is, of course, aware of this. “People
who buy online tend to be more tech savvy and
want the best bang for buck,” says Robin Eyck-
mans, Meizu’s other global branding manager.
This forces companies who sell most of their
phones online to settle for razor-thin margins.
That’s why Meizu is working hard to expand. It
employs 4,000-plus people and has about 2,
stores worldwide, in China, Southeast Asia and
Europe. Eyckmans says the company is actively
looking to add more.
That costs lots of money, of course. And
although Meizu manages to sell each phone at
a profit—which is impressive, considering the
excellent build quality and low prices—sources
in China say that wasn’t enough to prevent a
financial loss last year. The good news is that
Meizu is backed by Alibaba, which is worth
a reported $28.5 billion. With Alibaba’s deep
pockets, Meizu can take its time achieving its vi-
sion. That vision, according to people at Meizu,
is to focus on diferentiating itself from competi-
tors and delivering quality products at competi-
tive prices. (Meizu’s latest phone, the M3 Max,
accomplishes this, in my opinion.)
“Everyone knows products are made in
China. Good products. Practically all phones
are made here, but people still look at these
products diferently,” Li says. “I want Meizu to
become not just a Chinese hardware company
but a strong international brand.”INSIDE MEIZU
BEN SIN IS A HONG KONG-BASED CONTRIBUTOR TO FORBES.COM WHO WRITES ABOUT CONSUMER TECH.
THOMAS KUHLENBECK FOR FORBES
TECHNOLOGY BEN SIN // GADGETMAN
F