Qihoo 360 launched a 399 yuan (US$64) smartphone after it invested US$410 million to create a phone joint venture with Coolpad, China's biggest Internet security firm said yesterday.

The new phone, sold under Coolpad's Dazen brand on the Internet, features Qualcomm quad-core chip, a 5-inch display and 8-megapixel camera. It is set to grab a share of the Chinese smartphone market at the entry-level segment, industry insiders said.

"It's a market strategy to attract users," said Yan Zhanmeng, analyst at International Data Corp. "It puts huge pressure on smaller brands which depend on selling low-cost phones."

Xiaomi and Lenovo have also unveiled models priced at 500 yuan in a fiercely competitive market. Qihoo 360's new phone is 100 yuan cheaper than Xiaomi's entry-level Redmi model whose price has just been cut from 599 yuan to 499 yuan.

Qihoo 360 is also set to launch feature-rich phones under new brand Qiku at a "much lower price" than those made by other companies, Zhou Hongyi, chairman and CEO of New York-listed Qihoo 360, said earlier.

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