Call it the China Dream Team — Alibaba, Tencent, Huawei and Lenovo. And add Xiaomi to the mix.
Xiaomi is the mainland’s answer to smartphone giants Apple and Samsung.
While Apple excels in style and innovation and Samsung dominates in breadth and depth, Xiaomi is the undisputed champion when it comes to pricing.
In fact, its pricing strategy just made it No. 3 in worldwide sales in the third quarter.
With a humble name that literally means “small rice”, Xiaomi is big thanks to the vision of its founder, Lei Jun.
The smartphone maker is expected to report a 75 per cent increase in net profit this year after an 84 per cent surge to 3.46 billion yuan (US$565.34 million) last year.
In the four years since its founding, Xiaomi has stunned the industry by how quickly it has risen in a market that has marginalized the likes of Nokia, Blackberry and HTC, not to mention a bevy of Japanese household brands.
Xiaomi’s flagship Mi 4 smartphone, which resembles the iPhone 4 but runs on Android, weighs in at just 1,999 yuan. Compare that to 5,288 yuan for an iPhone. 6.
Xiaomi smartphones have no top-of-the-line features such as fingerprint sensors or mobile payment, but who knows what Lei Jun has up his sleeve next.
A public listing is reportedly in the pipeline as soon as next year, which could value the company between US$40 billion and US$50 billion.
Last year, Xiaomi was worth about US$10 billion.
Is the market expecting too much from this four-year-old company?
Obviously, there are cheaper phones in the Chinese market but Xiaomi handsets outsell all other devices with comparable features.
Xiaomi’s scorching growth is being compared with that of Alibaba during the past five years, although the company lacks the absolute market dominance of the e-commerce giant.
Still, it can potentially corner 5.6 per cent of the global market, with plans to release more smartphones next year.
Things are also changing fast in the mobile phone industry.
Seven years ago, who would have thought that Samsung and Apple will be what they are now? Who would have imagined that Motorola, who fathered the mobile phone concept, would pass to Google and then to Lenovo?
Until 2010, Xiaomi itself was just an idea.
I have been a Xiaomi user for the past six months. I am constantly on the lookout for faster and lighter mobile phones but I won’t pay double or triple premium on a Samsung or Apple smartphone.
I just need a bit more patience because I know competition will bring the best to customers.
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