Xiaomi makes strategic move in iQiyi

Xiaomi, which became the world's No. 3 smartphone vendor in September, made the biggest strategic investment in the company's history by injecting US$300 million in iQiyi, a Baidu.com-invested online video website, both sides announced yesterday.

The companies said they will tap their huge user bases to cooperate on product, content and technology, especially in the mobile Internet sector.

Shunwei Fund was involved in the deal and Baidu also increased investment in iQiyi, both sides said, without elaborating.

"It helps Xiaomi expand business scope on content after its smartphone sales jumped," said Luo Lan, a researcher of Beijing-based International Analysys. "iQiyi is expected to get more users and traffic from the deal."

IQiyi has more than 450 million registered users and 60 percent its traffic come from mobile devices, including Xiaomi's popular smartphones.

The content from iQiyi will enrich Xiaomi's services on smartphones and set-top box and TV business.

The investment was the latest move for Xiaomi after the company unveiled two weeks ago a new US$1 billion investment fund for content, and appointed former Sina.com Editor-in-Chief Chen Tong as vice president for content investment and operations.