Photo/Hua Ang

Jan.7 (NBD) -- Chinese smartphone maker Xiaomi Corp has bought roughly 65.2 million shares, or 0.48 percent, of consumer electronics giant TCL Corp as of last Friday, according to a filing to the Shenzhen Stock Exchange on Sunday.

According to the filing, the two parties will make joint efforts in the research and development of smart hardware as well as core, high-end and basic electronic components. Both parties believe their businesses are highly complementary and the tie-up will boost their performance.

It's noticed that panel maker China Star Optoelectronics Technology, a core unit under TCL, took the fifth place worldwide in terms of shipment of large panels in the first three quarters of last year. Obviously, that's what Xiaomi sees in the new investment.

Xiaomi claimed previously its smart TV brand has taken lion's share in the domestic market. Through the tie-up with TCL, Xiaomi could expand its international footprints.

Chen Hang, an industry analyst at Southwest Securities, told NBD that panel is important as it accounts for around 80 percent of the cost of a complete TV. Apparently, Xiaomi, via the cooperation with TCL, tries to secure stable and relatively economical supply of display panels in the upper stream of the industry. In the future, Xiaomi also can get a head start by making more customized panels together with panel providers.

Zhou Shouzi, CFO of Xiaomi, previously told NBD that the company will make forays into the large home-appliance market. And this statement was once again confirmed by founder of Xiaomi in his Sina Weibo post Sunday who claims the company will focus on this sector this year.

Less than one month earlier, Xiaomi updated two types of air conditioners and brought its first washing machine to the market. So far, Xiaomi has been able to provide all large home-appliances except refrigerators.

However, there is still a long way to go. An industry insider told NBD that Xiaomi's success in the TV market is reasonable because TVs rely on contents and this has some connection with its internet features. However, other large home-appliances such as refrigerator, air conditioner and washing machine require long-time research and development for their particularities. In the short run, these markets are hard to be reshuffled as it has long been dominated by industry giants like Gree and Haier.

China International Capital Corporation Limited expressed similar view in a report, saying Xiaomi has a clear advantage in distributing channels and prices in emerging home-appliance fields such as air purifiers and vacuum cleaners. However, in the large home-appliance market, there is large room for Xiaomi to improve, including supply chain, scale, and brand-building. In addition, installation and after-sales services are also need to be addressed.

Email: tanyuhan@nbd.com.cn