China Smartphone Star Eyes US Market
Xiaomi might not be a familiar name outside of China, and certainly not in the US, but that may soon change.
The four-year-old handset firm caught attention outside China when it enticed Google's Hugo Barra to take over its Android business in last August.
But it's now starting to take its distinctive and so far highly successful business model abroad. It has had some early success in Singapore, and has nominated ten other countries for expansion this year. Barra has told an Android news site that the company will target North America from as early as next year.
Last year it sold just under 19 million phones, increasing sales by 150% to 31.7 billion yuan ($5.1 bn) -- but the sales chart doesn't tell the full story.
The company updates its Android-based OS, MIUI, each week based on customer suggestions. It holds feverish events with delirious fans, known as "Mi-fen", whose passion makes Apple fanboys look anemic. During one of these in April it sold 1.3 million phones in a day.
By limiting its distribution to online, Xiaomi, whose name means "little rice," creates scarcity. Right now it has a lengthy waiting list for half a dozen devices, including 9.82 million in the queue for a single product, the Mi 2.
Until now, it has sold just a handful of devices outside China. But the appearance of President Lin Bin onstage at the GSMA's annual Asian conference this week underlines its global ambitions.
Xiaomi has a solid international background. Founded in April 2010, its original backers included Qualcomm, Singapore government investment arm Temasek, and IDG Capital. Its eight founders, including Lin and CEO Lei Jun, all had a history with foreign companies in China such as Google, Microsoft and Motorola.
In his pitch to the GSMA audience, Lin cited figures that showed that seven Xiaomi handset models ranked in the top 15 devices most heavily used online in China. He says the new Mi 3 is the world's fastest smartphone and the first non-PC to carry the Nvidia K1 chip.
With the support of its suppliers such as Qualcomm Inc. (Nasdaq: QCOM), Nvidia Corp. (Nasdaq: NVDA), Sony Corp. (NYSE: SNE) and Sharp Electronics Corp. , it has expanded its product line to tablets, smart TVs and hi-fi gear.
While the company sells directly to users in China, it may decide it needs help in the channel in cracking new markets. Opportunities beckon for operators.
Robert Clark, contributing editor, special to Light Reading