Qihoo’s CEO Zhou Hongyi Explains Why Haier is Selling Qihoo’s Phone

Everybody and their mother seems to be getting into the cheap smartphone business these days. Dodging allegations of fraud, Qihoo 360 just launched its latest entry in the genre in collaboration with Haier. But why work with Haier instead of making the phone oneself? CEO Zhou Hongyi took some time off from talking shit about his competitors to explain his philosophy to Southern Metropolis.

“We’re not getting a cent from the sale of the phones,” Zhou said, “We still think that professionals should handle what they’re experts in [so Haier is running manufacturing and sales]. Qihoo is just doing two things, the software experience and promoting the phone to our users.”

Haier was specifically chosen, Zhou implied, because Qihoo wanted a company with the ability to manufacture the best product, the ability to provide good after-sales service, and the willingness to offer products for low prices. Haier also sells a lot of things to a lot of people, which was important to Qihoo because of its 400 million-strong userbase.

So what is Qihoo actually doing for this Qihoo phone? It’s a little hard to tell. Zhou says that users will see what Qihoo adds to the experience when they’re using the phone’s software, but the phone is running pure Android 4.0, meaning that Qihoo’s additions are apparently limited to pre-installed apps (which Zhou says can be deleted). Zhou says the plan is for Qihoo eventually to make money off software services rather than phone sales, and he cited examples like selling digital items in popular games.

Zhou did add that he didn’t mean Qihoo would be secretly nickel-and-diming users to death with hidden software fees, and indeed one of the phone’s Qihoo apps will prevent other apps from doing this to users.

Zhou made it clear that he sees the “internetification” of hardware as a growing trend, and I’ve seen him cite Amazon’s Kindle Fire as an exmaple of this in several interviews (including the Southern Metropolis piece) over the past two days. That’s exactly where he sees the industry headed: hardware launches that rely heavily on software and after-sales purchases and services on a platform to make money. Qihoo has taken its first steps toward that world with this most recent Haier launch. But will customers take the plunge with it? We’ll have to wait and see.

[Southern Metropolis via Sina Tech]