For month, there have been widespread speculations (Chinese) that the web security company Qihoo 360 Technology Co Ltd (NYSE:QIHU) was looking to acquire or partner with a smartphone maker. The rumors have turned out to be true. On Tuesday, Qihoo 360 Technology announced that it has formed a joint venture with leading smartphone maker Coolpad. Qihoo 360 is investing $409 million in cash for a 45% stake in the JV.
The JV will make phones under the ‘Dazen’ brand
The venture will focus primarily on “mobile terminal products” that will be distributed through the Internet. The joint venture will build a solid mobile ecosystem involving design, production marketing and sales of smartphones and other innovative mobile products. Qihoo 360 said the device will initially be sold in China, the world’s largest smartphone market.
Coolpad has extensive experience in smartphone design production and supply chain management. The company has a history of releasing interesting devices such as Coolpad Platinum Dayton. The joint venture will leverage on Coolpad’s expertise and Qihoo’s capability in app development and online marketing. The JV will market its smartphones under the brand name ‘Dazen.”
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Qihoo to become the default provider of mobile services to Coolpad
Notably, Chinese pop star Han Geng recently posted a photo of Coolpad Dazen X7 smartphone on his official Weibo account. The most surprising thing about the image is that the smartphone seems to be completely made out of glass. Reports suggest that this handset will be launched in 2015 with a price tag of around $807.
Qihoo said in a statement that it would now become the default provider of important mobile services such as mobile search, mobile app store and mobile security to the entire portfolio of Coolpad’s smartphones. Notably, Coolpad was the largest 4G smartphone provider in China in October, 2014. Qihoo has made several attempts in the past to enter the smartphone market, but it is yet to taste success in a fiercely competitive industry.
Qihoo 360 shares fell 2.10% to $58.40 at 10:03 AM EST on Tuesday.