Date
18 November 2017
Xiaomi has expanded to India, Indonesia and other parts of Asia and is looking at a move into Brazil and Mexico next. Photo: Bloomberg
Xiaomi has expanded to India, Indonesia and other parts of Asia and is looking at a move into Brazil and Mexico next. Photo: Bloomberg

Xiaomi defends its low-cost smartphone business model

Chinese smartphone maker Xiaomi Inc. said its international expansion plan focuses on markets where the price of a smartphone constitutes a large part of a consumer’s income.

Those markets are where Xiaomi’s model of selling smartphones at near cost works especially well, Hugo Barra, Xiaomi’s global vice president, said at the WSJD Live Global Technology Conference in California.

Xiaomi passed Apple Inc. and Samsung Electronics to become the best-selling smartphone provider in China in the second quarter, according to Canalys, a research firm. It has moved into India, Indonesia and other parts of Asia.

Barra said the company is looking at a move into Brazil and Mexico next, according to the Wall Street Journal.

Xiaomi has taken the Chinese smartphone market by storm. It offers its phones at rock-bottom prices, often selling out new models online in minutes. It makes money by charging for services and accessories that accompany the phones. 

But for all of Xiaomi’s successes, rivals and critics have said the company would face patent infringements if it expanded to the United States or Europe because it doesn’t have enough intellectual property to strike cross-licensing patent deals with other smartphone manufacturers.

“Our situation when it comes to patents is the same as everyone else,” Barra said. His company files for a significant number of patents in China and strikes licensing deals abroad.

Litigation risk “is not a determining factor” in deciding the best markets for Xiaomi’s international expansion, he said.

– contact us at english@hkej.com

JL

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