#LeEco, the China-based #Company which dreams of making it big in the US market as well, has not been able to do anything significant so far. Since its launch in the US, the company has been struggling. It recently hit a rough patch with severe cash crunch issues, but came out of it by raising $2.18 billion earlier this year. However, the company is still struggling. The company which made it big in China with its media platform, is now shutting down #Ecopass -- its video platform in the United States.
How important was EcoPass?
The EcoPass service was thought to be very important for the company for U.S.
expansion. It was supposed to differentiate the company’s phones and TVs from competing products. It was also a way for the company to get recurring revenue after the initial sale of the products. This was important for the company, as LeEco sells phones for just $200 to $350, meaning very low margin of profit.
What about users?
In a statement, the company has confirmed this development and said that they are discontinuing the service, effective from the 1st of April. The service was launched in the US to offer its subscription to the buyers of its earphones and TV. However, it has now been confirmed that the subscription will be replaced with 3-months of subscription of DirecTV NOW. The company's spokesperson also said that they believe that the new offering provides more value to the users as it comes with more than 60 live channels, along with several shows and movies..
Why shut down EcoPass?
If the service was this important for the company, why are they shutting it down? Well, its quite simple -- no takers. As per the reports, LeEco was struggling to find an audience for its products in North America. Various reports have suggested that the company has recently missed an internal goal of $100 million in U.S. hardware sales. It is off-the-mark by miles, in terms of achieving its target. For a target of $100 million, it managed to sell about $15 million worth of devices. Thus, the company has also cut-off its US-based staff.
The decision to close down EcoPass is the latest one from the company in what could be called a string of bad news. To overcome its cash crunch situation, the company raised $600 million last year. This year, it got $2.1 billion, but that was through selling of land that it picked up from Yahoo.
LeEco entered the US market with a big bang, hosting a massive party to introduce its range of products -- phones, TV's, bikes, VR headsets and its own electric cars.