The Chinese smartphone maker, Xiaomi, has a CEO who isn’t afraid to mimic the late Steve Jobs.
Xiaomi Inc. (Chinese: 小米科技; pronounced shao-me), a privately owned company that designs, develops, and sells smartphones, apps, and consumer electronics, released its first smartphone in August 2011. Since then, Xiaomi has gained market share in China and has expanded into developing a wider range of consumer electronics.
The products the company made quickly rose to popularity among Chinese smartphone buyers who wanted the best without much expense. Xiaomi isn't the only company building inexpensive Android smartphones in China, but it's unique for using high-end hardware and actually listening to its users.
A Man Like Apple
Led by Chairman and CEO Lei Jun, the company's marketing strategy is described as riding on the back of the "cult of Apple" using a similar marketing strategy. Lei Jun mimics Steve Jobs image, including jeans and dark shirts, and Jobs' style of product announcements. Lei Jun wants Xiaomi to be China’s answer to Apple. And his style has been categorized as a counterfeit Jobs.
The company's strategy has been categorized as counterfeiting philosophy and mindset. Despite repeated comparisons to Apple, Xiaomi maintains that it espouses a different set of principles.
Xiaomi managed to sell 7 million smartphones in 2012. The three-year old phonemaker that is still relatively unknown outside Asia, has been quietly stockpiling tech talent as it builds a business worth $10 billion. The company expects to sell 15 million phones by the end of 2013 (5 percent market share), and is doing so well that it's challenging Samsung, a formerly dominant force among OEMs in China (17.6 percent), and beating Apple (4.8 percent).
The company is transparent about its desire to be a global player, and hiring Hugo Barra from Google. Barra, the man who was Google's Vice President of Product Management for Android, announced that he is leaving Google.
Going global is a big risk, and not something many Chinese companies have managed to pull off successfully. Chinese companies, just like like Taiwanese manufacturers before them, are still better known as the workers that execute the innovative designs of Western firms. But expectations for Xiaomi are high, especially when the company is now the third biggest e-commerce in China, and seen to be a competitor to Alibaba Group Holding, Baidu Inc., and Tencent Holdings Ltd.
Apple Counterfeit and Listening to the Crowd
Apple has long been known to sell both hardware and software. And by selling those, the company that is founded by the late Steve Jobs and Steve Wozniak, along with Ronald Wayne and Mark Markkula, has made its fortune.
Since the rise of smartphone, and with Apple pioneers the call with its iPhone, the company has been selling quality hardware to meet quality demands. On the other hand, Xiaomi's most popular product aren't their phones, but their MIUI software, in the form of ROMs as well as custom launchers and lockscreens, all famous for their.
If the Apple Store has been key for Apple's success, Xiaomi don't have a single physical store: they sell their devices (at cost) via the internet, including an experiment in December of last year where they sold 50,000 devices in 5 minutes via the social networking site Sina Weibo.
By focusing on the eco-system around their devices, and the voices of fans. Their app store crossed a billion downloads earlier this week. They also sell various accessories that are highly popular.
What Xiaomi did was like what Amazon did with Kindle: selling hardware as cheap as possible to get massive amount of users, and monetize them from online transactions.
The key to convincing international carriers to take a gamble on yet another smartphone, and to push those products alongside and above more dominant and mature bets like Samsung and Apple hardware, will be convincing carriers that it's in their best interest to do so, and that means convincing them that it's possible to get a higher ARPU from Xiaomi smartphones than from anything else in the market.
Higher app and mobile we use mean more data used (and more pricey data consumed), which, paired with lower subsidy costs thanks to cheaper wholesale hardware prices, could make Xiaomi a very attractive alternative.