It is 2007. People in India are just figuring out what a smartphone can do.

The feature phone is still king. You could make calls, send smses and play a few games. Take pictures? Not unless you were willing to shell out a ton of cash. Browse the web? Don’t make us laugh — remember the Nokia Communicator?

And then of course, Apple introduced the smartphone, which pretty much changed the mobile game. With its nifty touchscreen, applications for everything from news to games, and a decent camera, everyone wanted one. But not everyone could afford it.

This was, of course, the ideal opportunity for other manufacturers. And the innovative Chinese phone brands, quick to sense a golden marketing opportunity, started manufacturing a slew of their own ‘smartphones’, a lot of which also made it to the Indian market.

They had a design unlike no other. You would give it a second glance simply because it was interestingly weird — in some cases it looked exactly like the iPhone and they had various attachments ranging from SLR quality lenses to radio that came with the device. Not to mention they had no warranty, no IMEI and were liable to conk off anytime.

But cut to 2014 and we are in a vastly different place.

Apart from the fact that the smartphone is now a easily available device, and the preferred computing device of the masses, it was also the year that tech giants like Samsung and Apple (with their higher end prices) saw their domination of the smartphone category start to waver.

And a small Chinese company is at the forefront of this change.

Enter Xiaomi.

What is it that you really know about Xiaomi? Is it just that their affordable smartphones have flash sales on Flipkart every once in a while and are sold out in less than 15 seconds? Well, that is one aspect.

2014 marked the entry of Xiaomi smartphones in the Indian market. They created curiosity and excitement among the crowd on account of their specfications and price. People tend to be skeptical of Chinese goods in India fearing that they won’t last. But Xiaomi have succeeded in changing that trend.

Xiaomi was founded in 2010 and their focus was mainly smartphones and mobile apps. The company launched their first Android based firmware MIUI in 2010 and one year later, launched the Xiaomi Mi1 smartphone.

Today, Xiaomi is China’s most popular and loved brand, and is also the third largest smartphone maker in the world. That’s quite a jump in four years. But what did the company do right? For starters, it gave the users exactly what they wanted.

The company offered a simple and minimalistic design paired with a good set of specifications at a affordable price. They did not rush in to launch new headsets every 8 to 10 months. They waited for their audience to come to them and did not advertise their brand all over the city. They reached out to customers first through ‘word of mouth’ and social media. They made the smartest, yet riskiest decision by selling their products exclusively via online stores and not owning a single retail store.

Once the company established loyalty in their homeland, they decided to go global.

They entered a few other markets and tried following similar patterns. Evidently, it worked! Slowly and steadily, the company made its way into the league of Apple and Samsung in terms of fans. Of course, not in terms of making overnight profits but by having the world recognize their brand.

The company has also recently hired former Googler Hugo Barra to take control of worldwide product planning. It is safe to say now that the company has a serious expansion plan in mind. In an interview with FoneArena, Barra said that, “working at Xiaomi today feels like working at Google in 2001, because I do believe that what we are building is going to be become one of the next greatest companies in the world.”

Barra leaving Google was a big step for him as well as for Google. He is the first non-chinese employee to enter Xiaomi.

Hugo Barra (Image: Indian Express)
Vice President of International, Hugo Barra (Image: Indian Express)

Xiaomi is the company that honestly, took into consideration what users want and enjoy in a phone and tried as hard as possible to match their needs for the lowest possible price. This could be one of the reasons why people respect it.

Recently, China snapped up 1.16 million Mi phones in 24 hours at the Alibaba Singles’ day sale. Numbers that display the power of the brand.

TechCrunch reported that Xiaomi had sold some 720,000 units by mid-day. Of that figure, around 250,000 were its flagship $300 Mi4 device, with 460,000 units of its $150 Redmi device snapped up. In addition, it says it sold 25,000 of its Mi TVs.

India, as we all know, has similar frenzied interest in the device. Every Flipkart flash sale sees Xiaomi devices snapped up in a matter of seconds, although we do not have a full idea of just how many units have been sold.

TechCrunch also reported that, Xiaomi shifted 26.11 million handsets in 1H14, an increase of 271 percent from a year earlier — and more than its total phone sales for the full-year 2013 (18.7 million). Xiaomi has previously stated that it aims to sell 60 million handsets this year. Its phone sales in 2012 were 7.19 million, underlining how fast this business is growing. The relatively low price of Xiaomi’s handsets (vs the specs they pack) helps explain why their handsets are selling like hot cakes.

So far the company has played its cards smartly by introducing good yet cheap phones in the market. This way, they are gaining fans, but not making profits. But once the fans are in place, they can give severe competition to high-end smartphone makers.

Xiaomi CEO Lei Jun has carved out a very interesting strategy which other competitors do not follow. Techinasia said, ‘Jun’s journey goes back to 1992 when he joined software maker Kingsoft after graduating from Wuhan University. Kingsoft back then had just five or six people, but today the company has more than 3,000 employees. The company IPO’d in Hong Kong in 2007. While working at Kingsoft, Lei Jun ran the site as a side project. Joyo started as a download website but later it became an online bookstore. Success followed, and Amazon subsequently acquired Joyo for a whopping $75 million in 2004 – now it’s today’s Amazon China, at Lei Jun pays great credit to Steve Jobs who he believes has shaped how the world uses phones and the mobile internet.

Xiaomi CEO Lei Jun (Image: Reuters)
Xiaomi CEO Lei Jun (Image: Reuters)

Known as the ‘Apple of China’, their sales have surged to over 15 million, up 278% year over year. And next stop? Why India of course.

Apart from manufacturing devices, Xiaomi is now beginning to invest in 4G chip solutions. Reports also suggest that it may launch a GoPro-like action camera. They are also going to acquire a stake in China’s online video company Youku Tudou. These are just a few ventures the company is looking into.

Xiaomi actually offers a very valuable lesson to other players in the tech space. Sometimes you just have to stick to the basics. If you have a great quality device at affordable prices, the (smartphone) world is your oyster.

Apple, Samsung; Please follow suit!

Publish date: November 18, 2014 4:57 pm| Modified date: November 18, 2014 4:57 pm

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