Xiaomi – From Chinese Apple to Chinese Samsung?
To understand this, we need to look at Xiaomi’s smartphone business. At the end of 2014, Xiaomi recorded a massive 336% year-over-year increase in smartphone sales, according to Gartner. This continued in the first half of 2015, with Xiaomi announcing that it sold 34.7 million smartphones in the first six months of 2015.
The Chinese company, which was initially credited as a maker of affordable Android alternatives to Apple’s iPhones, also received an estimated valuation of $45 billion (about Rs 2,84,454 crore) and raised Rs 1.1 billion. dollars (about Rs 6,999 crore) by the end of 2014.
But IDC reported a drop in smartphone shipments for the first time in China, leading many to believe that smartphone makers including Xiaomi could be hitting saturation.
During the same period, Xiaomi launched more smartphones and also unveiled a range of devices in different segments. Although Xiaomi created strong demand with its range of Mi and Redmi devices, low prices meant profit margins would also be slim, meaning Xiaomi needed to expand beyond its smartphone business.
Earlier this year, Xiaomi unveiled its mi.com online store in the United States, excluding France, Britain and Germany, where it also sells accessories. This year, the Chinese company also started manufacturing smartphones in Brazil to sell locally, which was the first major step beyond Asian markets.
The company unveiled the Mi Band, its first wearable fitness tracker, priced aggressively at $13 (around Rs. 790), and launched in various markets including India. In late 2014, Xiaomi also stepped into the Internet of Things (IoT) sphere in China with the launch of the internet-connected Mi Air Purifier priced at CNY 899 (about Rs. 8,900) as well as the Mi Water Purify, priced at CNY 1299 (around Rs. 13,300).
Continuing the frenzy, Xiaomi launched several TV models under the Mi TV series in China, except the Yeelight bedside lamps priced at 249 CNY (about 2,500 rupees). Mi Power Bank portable chargers are another type of product on offer, and Xiaomi has also launched Mi Wi-Fi nano wireless routers alongside Mi USB fan and Mi LED light.
Tough companies like GoPro, Xiaomi have also unveiled an action camera named Yi Action Camera, priced at CNY 399 (around Rs. 3,900). Some of the other products announced by Xiaomi include the smart shoes and pencil-shaped Mi Rainbow 5 AA batteries.
In mid-October, Xiaomi also launched its first two-wheeled, self-balancing, battery-powered electric vehicle named Ninebot mini.
Xiaomi’s various launches and expansion into e-commerce may seem like a well-thought-out plan on the company’s part, but it risks losing focus on the products and launches that helped it become “China’s Apple”. In fact, Xiaomi is starting to look more and more like another consumer giant – Samsung (not that there’s anything wrong with that).
The South Korean company has gone from being a consumer electronics giant to being a leader in the smartphone segment. This ended up being arguably Samsung’s most successful part. However, things have changed for the company. Samsung has a history of releasing products that catered to almost every taste and it’s done that with smartphones too – but not all of them have been successful. This caused Samsung’s earnings to fluctuate dangerously as the company struggled on multiple fronts, instead of focusing, though, okay, that’s an oversimplification.
If we compare Apple and Xiaomi, we can see obvious differences in their approach. Apple has never been a budget player, which is one of the biggest differences between the two. The Cupertino-based company has its own army of Apple fans built over the years in different markets and various launches, including iPhones, iPads, iPod touches, Macbooks, iMacs, Apple TV and most recently the Apple Watch. .
But there are also some similarities – Xiaomi has built its reputation on releasing one phone at a time, offering excellent value for money. Although it was able to offer a budget product, the design and build quality of Xiaomi phones was superior to what existing brands were willing to offer. And, like Apple, Xiaomi offered a complete hardware and software solution, since Google Play isn’t a factor in China. Xiaomi’s MIUI and Mi Store have been as important as hardware in its success story.
But while Xiaomi has had huge success in China, the response in other countries has been less encouraging for the company. Some countries like India are seeing the phone sell out within minutes, but if the total inventory is low, that doesn’t really help the business.
In turn, the company now seems to be taking a Samsung-like approach and creating something for everyone. The question is whether he can manage to be a jack-of-all-trades. It’s a tough tightrope, and one that few brands have pulled off as well as Samsung.
So far, Xiaomi’s product catalog is still relatively “curated”, but as the brand continues to add products to the portfolio, it’s starting to feel a bit random. Is it Apple from Xiaomi China or Samsung from China? Presumably, the company would instead be considered a separate entity and try to offer a mix of different products that actually give consumers what they want.
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