LeEco CEO Jia Yueting says Apple is outdated

Apple now 'outdated?'
Apple now 'outdated?'
Risks to Apple
Risks to Apple
Apple's innovation strategy
Apple's innovation strategy

Apple is "outdated" and losing momentum in China, billionaire entrepreneur Jia Yueting told CNBC in his first international television interview.

Jia is chief executive and chairman of Chinese conglomerate LeEco (formerly LeTV), which is best known for being the "Netflix of China," but has a product range that includes smartphones, televisions, mountain bikes and, most recently, electric vehicles.

Last week LeEco launched the self-driving, smart LeSEE supercar, designed to rival Tesla's Model X. In the latest evolution of the "LeEco ecosystem," Jia hopes to sell content, including movies, TV shows and music to LeSEE drivers.

Jia Yueting introduces the all-electric battery 'concept' car LeSEE on April 20, 2016 in Beijing, China.
VCG/VCG | Getty Images

Speaking at a meeting of the China Entrepreneur Club, an exclusive summit of business leaders, 43-year old Jia explained why foreign rivals did not worry him, particularly Apple, which is also expanding its ecosystem beyond consumer technology to driverless cars.

"We think the difference between us and Apple is very large. Apple is a mobile phone company focused on hardware and software," Jia said at the weekend event in Jinan. "LeShi [another name for LeEco] is focused on the internet first, and only then on software, and finally on hardware."

Apple's product design was also obsolete, he added.

"Apple only has individual apps. This was the right choice during the first generation of mobile net, when CPUs [central processing units] and the mobile network speeds were not fast enough," Jia said. "However now we're moving into the next era of mobile internet, these problems no longer exist. Moreover, having separate apps just means great obstacles in the user experience. We hope to break down these obstacles."

A Chinese policeman stands guard in front of a portrait of Mao Zedong at Tiananmen Square in Beijing, China.
China could slam door on Apple, says top global risk expert

Sales in China, Apple's second-biggest market, have also deteriorated, Jia noted.

"One of the most important reasons [for slowing sales] is that Apple's innovation has become extremely slow," he said. "For example, a month ago Apple launched the iPhone SE. From an industry insider's perspective, this is a product with a very low level of technology...We think this is something they just shouldn't have done."

Apple's SE phone could increase the company's installed customer base for other services over the long term, said Angelo Zino senior industry analyst at S&P Global Market Intelligence. But there's a possibility that the lower-priced iPhone SE could pressure Apple's margins, if its effort to attract customers in emerging markets means fewer sales of high-end products, Abhey Lamba, senior technology analyst at Mizuho Securities, told CNBC's "Power Lunch" Monday.

"When we look at Apple they clearly need the next ... driver," Lamba said. "The Watch hasn't cut it. And they're looking at content on the services side, on the iTunes side. We'll see how that works out. But definitely they need something to drive the next leg of growth."

Charles Chao, chief executive officer of Sina Corp., attends an IPO ceremony for Weibo Corp.
Chao says Sina, Weibo, not for sale despite rumored Alibaba bid

As an industry leader, Apple should be developing more cutting-edge products, Jia said. The iPhone was still a leader five years ago after being launched in 2008 but now the concept has "fallen behind," he said. Apple did not immediately respond to CNBC's request for comment.

"We believe the next generation of mobile internet will be more open, more ecosystem oriented instead of being a closed loop...Ironically, Apple's over-dominance, lack of internet-thinking and the closed off nature of its systems, all hindered innovation in the internet mobile industry," Jia said.

The Cupertino giant is expected to report a fall in smartphone sales when it announces first-quarter earnings on Tuesday.

"At this point we think Apple has now turned into this great valuation play, whereas if we do see some momentum on the iPhone 7 side, I think, all of a sudden, you start baking in some sort of growth driver for the company," Zino told "Power Lunch."

It noted "some signs of economic softness" in the Greater China region, particularly Hong Kong, when announcing fourth-quarter results in late January. But chief executive Tim Cook said the company remained "very bullish on China" given the low penetration of high-speed mobile data usage and the growing middle class.

Apple seen shrinking for first time since 2003

Jia, who started as a tech support worker before building his own IT and mobile company into a fortune estimated to be around $4.8 billion, is not shy when it comes to taking on industry leaders.

At the LeSee's launch, he told Reuters that while Tesla was a "great company," he was not "just building a car."

"We consider the car a smart mobile device on four wheels, essentially no different to a cellphone or tablet," he said. "We hope to surpass Tesla and lead the industry leapfrogging to a new age."

The LeSEE will be on display at the Beijing Auto Show this week.

—Follow CNBC International on Twitter and Facebook. CNBC's Anita Balakrishnan contributed to this report.