Xiaomi was founded in 2010 as a software company by Lei Jun, who created the MIUI ROM, which is based on Google’s Android. The goal of developing MIUI was to provide more functionality and a better user interface than Android…. Xiaomi entered the hardware market in 2011 with the release of the Mi One phone.
The History of Xiaomi
Xiaomi has managed to reach the top of smartphone sales in China, because it offers devices at a great price, features industry-leading cameras, comes with a strong design and relies on a tried-and-tested Android OS. To date, the company has released seven Mi series smartphones; the first six Mi-series devices were launched in 2012, which made a huge splash in the Chinese smartphone market. They were more affordable than the flagship devices available at that time. The first three devices were the Redmi 1S, Mi 2S, and Mi 2C. The last one, the Mi 4S, was launched in November 2013 and replaced the old Mi 3S, which was launched two years before. The Mi 4S was the first smartphone to be powered by the Snapdragon 801 processor.
Xiaomi has successfully built an ecosystem of over 100 million customers across a slew of its innovative products and services. Since 2011, Xiaomi has shipped over 170 million smartphones worldwide with revenue increasing by over 1,000% each year. It is no surprise that Xiaomi is ranked number 2 on the Forbes list of the world’s most valuable startups. Xiaomi’s Biggest Rival Xiaomi’s key rivals, in terms of sales, include Samsung, Apple, Huawei, Lenovo, Motorola and Oppo. It’s very hard for Xiaomi to beat these players in the race for the world’s number 1 smartphone company. However, in India, the company is competing directly with Samsung and has already overtaken Samsung to become India’s leading smartphone manufacturer.
While most tech companies in China tried to build products that use the latest technologies, Lei Jun believes that focusing on customer experience and the latest tech will not take you any further. The key to developing an awesome product is to keep your customers happy and add on the latest technology in your device at a reasonable price. Xiaomi sells its devices in various price ranges, and they don’t mind buying a sub-par device if it means you will be able to afford the best specs that they have. There is no doubt that Xiaomi is one of the world’s largest smartphone companies, and it sold over 60 million phones last year and now sells over 100 million phones each year, including their sub-brand Redmi.
How Xiaomi Became the World’s Biggest Smartphone Company
Lei Jun was hoping to strike the right balance between hardware and software and Xiaomi has consistently focused on becoming a hardware company. The Mi 1 featured all Xiaomi features: MIUI ROM, a responsive UI, a good camera with a high-quality camera module, a good build, an attractive design, and an efficient software (battery & OS). Ever since the Mi 1, Xiaomi’s strategy has stayed the same. The company produces small devices with the minimum hardware specifications (usually 4GB RAM and a Snapdragon chipset) and sell them for cheaper prices than the current market price. Xiaomi’s goal was always to provide a better user experience (both hardware and software) than competitors’ products, and the company achieves this goal every year with the launch of each new device.
How is Xiaomi Different?
Xiaomi is known for its first-of-its-kind budget smartphones with great features. It aims to provide its users with the best specifications at an affordable price. Price Range Xiaomi smartphones start at as low as $120 and go as high as $500. The devices are designed to cater to different segments. Users can purchase the devices as cheap as $60, in three different versions, including the entry-level Redmi 4A, the flagship Mi 5, and the Mi Mix, a bezel-less smartphone that has raised a lot of eyebrows. Xiaomi’s smartphones come in different configurations including 32 GB, 64 GB, 128 GB and 256 GB storage models. The 64 GB storage variants start at $170 and can go up to $400 for a 256 GB model. The Redmi 4A has been priced at $130 and the Redmi Note 4 will set you back $160.
The drawbacks of being a Chinese company
The company’s allure lies in its low-cost products and the growing market within China, not so much in the rest of the world. The US, for instance, has been a tough market for Chinese tech companies. If China’s stock market took a fall, you can guarantee that sales at a Chinese tech company would take a beating, hence, low margins. The annual revenue from the domestic market only accounted for 16% of Xiaomi’s total revenue. As far as the rest of the world is concerned, it’s more difficult to make and market smartphones in different languages. Not so long ago, China dominated global manufacturing, but over the years it has lost its shine, allowing foreign brands like Apple and Samsung to improve their manufacturing capabilities.
What does the future have in store for Xiaomi?
Xiaomi India seems to be on an aggressive pace of growth. They sold over 25.2 million smartphones in the fourth quarter of 2016, which is an amazing feat, considering that there were only 4.2 million phones shipped during the quarter in the entire country. Xiaomi’s head office in China reported a 751 percent year-on-year increase in revenue in the quarter, thanks to strong sales of their cheaper Redmi phone. The Chinese handset maker launched its Xiaomi Mi 6 phone on April 11 in Beijing, and the phone will go on sale in China on April 28. However, unlike the recent ZTE Nubia phones, this new smartphone doesn’t have a Qualcomm chip. The handset runs on Xiaomi’s in-house Surge S1 processor and uses a new and improved version of its Dash Charging.
Why is Xiaomi so successful?
It is because Xiaomi’s revenue model is different from that of other manufacturers. The company only makes money from selling smartphones, and the cost of each handset is only 10% of the retail price. Xiaomi does not sell devices at a discount, nor does it sell large number of devices at the same time. Xiaomi sells its smartphones through online portals, making money through a service fee. The company sells 30,000-40,000 units per day, hence there is no strain on its supply chain. Xiaomi is currently the world’s second biggest smartphone company after Samsung. Its annual revenue is in excess of $10 billion and its net profit over the last three years is over $2 billion. How has the company been able to achieve this?
Xiaomi is the best example of a company making almost everything in India. It’s the first smartphone company in the country, with a 35% market share. It manufactures smartphones that are selling for less than half of what Apple is selling its flagship devices for. Of course, Xiaomi is no Google. As a software company, it’s hardly as well-equipped to build a hardware division. And it still has no real presence in Europe. However, its massive rise, in China, gives us another example of the disruptive power of open source. Google itself has long criticized such measures. Yet the reality is that open source is giving rise to businesses that challenge the status quo, and the Chinese phone industry has been one of them.