Future of QMobile faces serious threats as Gionee – a Chinese smartphone manufacturer and the largest supplier for QMobile, becomes bankrupt and might go out of business completely. The Chinese brand used to sell smartphones under its own brand in China and also supply its devices for rebranding to other companies like QMobile in Pakistan.
According to media reports, Gionee has been facing a lot of troubles over the past few years. Latest developments reveal that the company has filed for liquidation bankruptcy that has been accepted. This could result in a major restructuring as Gionee has hired restructuring consultants a week ago.
Gionee’s Debt Situation
The company owns a total of CNY 20.2 billion (around $3 billion) to a total of 648 creditors in China; 50 percent of those are domestic and international banks. It has failed to meet its payment deadlines for the past year. Gionee recently applied for liquidation bankruptcy at Huaxing Bank while submitting its application to a court in Shenzhen that has now been accepted.
An interesting and rather unfortunate development has worsened the company’s finances recently. Liu Lirong, Gionee’s founder, lost a massive CNY 1 billion (~$144 million) that he bet in a casino. When asked about the source of his gambling money, he claimed that he hasn’t used the company’s money but may have “borrowed company funds”.
Liu further adds to this, saying that the company had been losing CNY 100 million (~$14.4 million) per month from 2013 to 2015, with the losses doubling over the past two years. However, he believes that the company can turn around its fortunes within the next 3 to 5 years.
Future of QMobile
As we have already mentioned that QMobile does not manufacture any of its own products and a large number of its mobile phones were supplied by Gionee right from its existence. If Gionee ends up its business, it might mean the end of QMobile too.
Meanwhile, the popularity of Chinese brands like Huawei, Xiaomi and OPPO in Pakistan has badly affected the business of QMobile since the past couple of years. It seems to be quite difficult for QMobile to register a comeback without the support of Gionee.
If QMobile fails to find any other supplier then we might not get to see another phone with the QMobile branding in the near future.