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Home-grown Xiaomi crushes Samsung in world's biggest market

Android smartphone startup tops Chinese table

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Chinese smartphone startup Xiaomi, whose turtleneck-clad CEO models himself on Steve Jobs (before Jobs died), has become the Middle Kingdom's largest seller of smartphones – outselling even former China top dog Samsung.

"This is a phenomenal achievement for Xiaomi," said Shanghai-based Canalys Research Analyst Jingwen Wang, whose firm compiled the latest market data.

"Undoubtedly this was helped by an anticipated, temporarily under-strength Samsung performance during the quarter. But that is only half the story - Xiaomi has also executed on its strategy to grow volume shipments."

Four-year-old Xiaomi sold 14 per cent of the smartphones shipped in the Middle Kingdom in the second quarter of this year, up from under 5 per cent in the first quarter. That's a growth rate of over 240 per cent, driven by a combination of well-designed low-end smartphones and higher value, sleeker models.

Xiaomi's CEO Lei Jun has said he styles himself on the late Steve Jobs and is often seen clad in similar garb or sneakers and a turtleneck, and Woz talks of the firm as one to watch. Xiaomi has been a real disruptive force in the Chinese market, selling high definition TVs and routers, and the rather dangerously named Mi Pad fondleslab.

This approach has certainly paid off in China, and since that's both the fastest-growing and potentially most valuable smartphone market then the company is looking good. So too are other local vendors according to Canalys; of the top 10 firms by sales in China only two are not home-grown firms – Samsung and Apple.

"Its aggressive pricing model will certainly resonate beyond China, but the challenge it faces in scaling its model for success on a global stage should not be underestimated," said Singapore-based Canalys analyst Jessica Kwee.

‘Xiaomi needs to build its international brand, and will need to localize its services offering with MIUI for the different markets into which it expands, else its differentiation, value proposition and service-oriented revenue streams will be eroded. Xiaomi does have the potential to be a disruptive force beyond China and international vendors should take note." ®

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