25 January 2020
Xiaomi believes a dual-brand strategy can help the firm tap into the high-margin premium phone market. Photo: Reuters
Xiaomi believes a dual-brand strategy can help the firm tap into the high-margin premium phone market. Photo: Reuters

Is Xiaomi getting its smartphone roadmap right?

Smartphone makers have been busy in recent months getting their new flagship products ready for this fall. Amid this activity, some players seem to resorting to, shall we say, sleight of hand as they tout new offerings for different markets. Just take a look at Xiaomi.

The Chinese phone maker has launched a flagship device called Mi 9T Pro in overseas markets, just three months after the debut of its annual flagship Mi 9.

What makes Mi 9T Pro an interesting case is that it is virtually the same as the Redmi K20 Pro, the flagship of Xiaomi’s mass market label which was spun off as an independent brand this year.

Industry analysts have noted that Mi 9T Pro is just a rebadged version of a device that has already been in the market for some time. 

Also, let’s compare the specs of Mi 9T Pro and the Mi 9. Both of them feature the Qualcomm Snapdragon 855 mobile platform. Both also have a triple-camera system at the back, of which the main camera is from Sony with F1.75 aptitude.

The newer device features a bezel-less screen on the front with a special design pop-up front camera, while Mi 9 still has a notch to house its earphone and front camera. Both devices have the same 6.39-inch screen with the support of on-screen fingerprint authentication.

Simply speaking, the Mi 9 and Mi 9T Pro are almost the same devices.

That would leave scope for confusion among customers, and prompt questions as to whether Xiaomi has rushed a product launch or if the firm has a clearly thought out marketing strategy.

One would expect smartphone brands to think twice before launching two devices with almost the same hardware specifications in the market in the space of just a few months.

Xiaomi, with its launches, prompts one to suspect that it may not be having a clear roadmap for its products.

The Mi 9 annual flagship was launched in March and was supposed to be the hot item in the first half until the launch of its second-half flagship Mi Mix 4 in the autumn. However, the group’s Redmi brand launched Redmi K20 Pro in China recently, and the same device is now being offered as Mi 9T Pro in the global market.

In China, Redmi is a mass brand compared to Mi, so that the firm is using the Redmi product line to drive sales volumes with cheaper product prices. Now, the launch of 9T Pro by rebadging an existing handset doesn’t make for a compelling case in terms of marketing strategy oversess.

From Xiaomi’s perspective, the new product launch would demonstrate better utilization of group resources to build new products and sell them at higher margins.

However, from a marketing perspective, customers may not be able to distinguish between existing products, and they may well defer their purchases and wait for the next model.

Xiaomi hoped the launch of Redmi brand will provide for a good segmentation strategy. Mi brand will target the premium market while Redmi would be for the mass and affordable segment.

Using a dual-brand strategy can help Xiaomi tap into the high-margin premium phone market and compete with Apple, Samsung, and Huawei. However, it appears the company is finding it tough to make headway.

With the Mi 9T Pro, Xiaomi could cannibalize its other own flagship, Mi 9, given the similar product specifications and features. In Hong Kong, Xiaomi has set the same price of HK$3,599 for both devices to avoid a backfire. But in China, Redmi K20 Pro is priced at 2,999 yuan while Mi 9 is offered at 3,299 yuan.

Xiaomi is trying to earn more by turning a Redmi device into a Mi gadget in overseas markets, but it is doubtful if the gambit will succeed.

With an unclear brand strategy overseas, Xiaomi’s smartphone shipments have remained at the same level as that seen last year. In the second quarter of 2019, Xiaomi shipped 32.1 million smartphone units, up just 0.9 percent from a year earlier. In comparison, Huawei saw its shipments jump 4 percent and Samsung posted a 7 percent increase in the same period.

To boost smartphone shipment growth, Xiaomi may need to wait for 5G to drive the next round of upgrades. But until that time, the company will need to be more careful in executing its brand strategy and product roadmap if it wants to generate enough excitement in the market.

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EJ Insight writer