Smartphone-maker Xiaomi Corp. has signed a global licensing deal with Meitu Inc, operator of selfie apps and maker of phones specifically designed to take attractive selfies. The move has been taken to expand its brand portfolio and to tap the female user market.
Under the association, Xiaomi will receive 30-year exclusive global licensing rights to Meitu’s branded smartphones and its popular photo-editing apps, the world’s fourth-largest smartphone maker said in a statement Monday as it released its latest financial report.
For the first five years, Xiaomi will offer Meitu 10% of the gross profit from each Meitu phone it sells, and Xiaomi will pay a minimum of $10 million in licensing fees per year after that.
As a part of that deal, all the future phones made by Meitu will carry its brand name, but Xiaomi will be responsible for design, R&D, and sales.
According to a statement, the board of the two companies believes that they are entering into this strategic cooperation agreement in order to accelerate their pace in carrying out this mission of expressing beauty. Meitu isn’t a major smartphone player and it is estimated to have sold around 3.5 million handsets in the past five years.
Meitu’s brand will “help us to gain more female users and to continue to expand and diversify our user base,” Xiaomi said.
Meitu said in its half-year earnings report that it sold 533,000 smartphones for the six months through this June. Xiaomi shipped more than 100 million units between January and October.
Xiaomi on Monday said it had a net profit in the third quarter amid robust sales in Europe and India. Profit hit 2.48 billion yuan ($357.2 million) against a loss of 11 billion yuan in the same period last year. Revenue surged 49% to 50.9 billion yuan.