Image-editing app developer Meitu Inc announced plans to close its smartphone business by middle of this year, Chinese news outlet Jiemian reported on Monday.
On November 19, the company and Chinese smartphone maker Xiaomi reached a global strategic cooperation arrangement that gave exclusive license to Xiaomi to use Meitu smartphone brand, image-related technologies and certain smart hardware products for 30 years.
Jiemian said the first smartphone made and marketed by Xiaomi with image and camera provided by Meitu will be launched by middle of this year.
The firm will continue to handle after-sales service of previously sold Meitu brand smartphones.
Meitu released its first smartphone on 2013 and then developed three series including M, V and T, with the smartphone business revenue once accounting for 80 percent of its total revenue.
The image-editing app developer changed its strategy to social platform on 2018. By the end of February, the monthly active users on Meitu platform reached 119.2 million.
According to Meitu's financial report, its revenue from internet business increased 26.3 percent year-on-year to 947.7 million yuan ($141.31 million) in 2018, with gross margin from the business surging 134.8 percent to 429.1 million yuan.
However, the firm's revenue from smart hardware slumped 50.7 percent year-on-year to 184.38 million yuan last year, and the total revenue was 2.79 billion yuan, declining 37.8 percent from a year earlier.