I was attracted by an article in Harvard Business Review, “Xiaomi, not Apple, is changing the Smartphone Industry” by Juan Sampere. Have you ever heard about Xiaomi? Have you ever seen its product? Personally, I believed this is only a Chinese company trying to gain domestic market share by taking advantage of Chinese regulatory (prevent foreign online services). But my belief has changed after I read about this company and this is actually a very smart strategy of Lei Jun, FOunder and CEO of Xiaomi bring this company to the current position after a very short time. Chinese customers prefer to use domestically produced products with “not very expensive” prices. This is not the first time a local smart phone company launch, there are about 3-4 Chinese firms holding major Smartphone market share in China, such as Lenovo, Huawei, Meizu, etc., however, Xiaomi has caught the world attention by their successful business model like no other.
The graph above was made in 2012. 2 years later, now 2014, Xiaomi captures 5% market share, increase 1.8 % from last year. Xiaomi even beats Samsung in China market. Xiaomi sold is 15 million smartphones this year, while Samsung dropped to 13.2 million sales from 15 million sales in 2013. Other local companies such as Chinese Lenovo, Huawei also decreased in sales.
Recently, Xiaomi has risen to 5th place in its share of global shipments, according to Strategy Analytics’ Woody Oh, could be the biggest achievement of this 4yrs old company. Even Xiaomi is claimed to copy Apple ideas and designs, Xiaomi Founder and CEO, Lei Jun states that Apple and Xiaomi are two totally different companies and one day people will understand that when they know more about Xiaomi and the company doesn’t want to be compared with Apple or be called “China’s Apple”.
Xiaomi is reaching Asia and Europe market with the affordable price products, unlike Apple’s core is premium products. Xiaomi has a little reputation in Australia, Europe and North America. This is predicted as a serious threat to giants such as Apple, Samsung, Sony and Google. Even Samsung remains the global smartphone leader with a 25.2% share of the market in Q2 of this year, followed by Apple with 11.9%, China’s Huawei with 6.8% and Lenovo with 5.4%, according to Forbes, Xiaomi seems to be growing fast in the very near future with their effective business model.
Please leave your comment below to share your thought if you have a Xiaomi Smartphone or Are you excited to try this product? Do you think this company could win some market shares in Australia?
Additional readings and sources:
I own a Huawei pocket wifi gadget, got it from Vodafone. Works like a charm; great quality and durable(dropped it on the floor a million times and still alive). Huawei is the second Chinese brand of gadget I’ve used. Lenovo laptop was first. But both are incredibility awesome products and super user friendly. I can foresee that with these emerging techs in China and their super duper cheap products, eventually China will replace most, if not all existing western brands not just gadgets, but everything else that they can replace with a Chinese brand counterpart.
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I agree that this smart phone market is getting extremely hot! Tablet and other smart products are hitting everyone everywhere! Chinese products are cheap, however, I guess what is the real challenge is changing customers’ perception! Beside, Apple and Google, Sony, HTC, etc., would not let their market shares go easily. I guess we will have more news to blog about this topic in the future. In the meantime, we could watch these giants compete with their best marketing strategy!
Such “hunger marketing” strategy has been controversial for Xiaomi in China. Similar doubt happens on Xiaomi that is famous for using hunger marketing strategy to sell smart phones and TV sets.
Thanks for your comment Tiffany. I think Xiaomi not only aims to get market shares in China, but also Europe and Australia and the fastest way they think they can approach that goal is selling smartphone and catching our attention by compete with iPhone. As long as their brand is on newspaper, online articles, they are gaining some brand reputation for free! Customers may or may not try the products, but eventually more people would know about the brand and their 1st step – building brand awareness achieved!
Other than Xiaomi, I personally believe that Nokia is in the middle of a top-secret strategy to launch their smartphone line & basically raise the bar of gadgets competitions. There’s a reason why Microsoft bought them. I don’t think Microsoft bought a brand that is practically a sinking ship just for the fun of it? Hmm
Thank you for your comment Johaniz7. Your thought is very interesting! Yes, we don’t know yet what would happen in the future with Nokia and I also believe that Microsoft already has a vision for Nokia and we are expecting something great from them in the future! Smart products and Internet of Things are getting hot!
It is indeed! All we need to do now is wait & become the victim. I mean i feel pressurized every time a new iPhone come out! Oh the agony of seeing my reduce bank account savings haha
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