Xiaomi

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Coordinates: 39°55′32″N 116°26′30″E / 39.9255°N 116.4416°E / 39.9255; 116.4416

Xiaomi Technology Co., Ltd
Native name
北京小米科技有限责任公司
Private
Industry Consumer electronics
Computer hardware
Founded April 6, 2010 (2010-04-06)
Founder Lei Jun
Headquarters Beijing, China
Area served
Selected markets
Key people
Lei Jun (CEO)
Lin Bin (President)
Hugo Barra (Vice President)
Products Mobile phones
Smartphones
Tablet computers
Revenue Increase US$12 billion (2014)
Number of employees
Approximately 5,000[1]
Website Xiaomi Global
Xiaomi mainland China
name
Chinese
Literal meaning millet
Xiao - "little", mi - "rice"

Xiaomi Inc.[2] (pronounced [/ɕawmi/], Chinese: 科技; pinyin: Xiǎomĭ Kējì, literally "Xiaomi Tech", or "Foxtail millet Tech")[3] is a privately owned Chinese electronics company headquartered in Beijing, China.

The world's 3rd largest smartphone distributor, Xiaomi designs, develops, and sells smartphones, mobile apps, and consumer electronics.[4] Since the release of its first smartphone in August 2011, Xiaomi has gained market share in mainland China and expanded into developing a wider range of consumer electronics, including a smart home device ecosystem.[5][6][7][8] The company's founder and CEO is Lei Jun, China's 23rd richest person according to Forbes. The company sold over 60 million smartphones in 2014.[9]

The company has over 5,000 employees, mainly in mainland China, Malaysia,[10] and Singapore, and is expanding to other countries such as India,[11] and Indonesia, and the Philippines.[12]

According to IDC,[13] Xiaomi is now the third largest smartphone maker in the world followed by Lenovo and LG at fourth and fifth place respectively. Samsung remains at the first place despite declining shipment volume, followed by Apple Inc. at second place. Xiaomi also became the largest smartphone vendor in China in 2014, having overtaken Samsung, according to an IDC report.[14]

At the end of December 2014, Xiaomi became the world’s most valuable technology start-up after it received US$1.1 billion funding from investors, making Xiaomi's valuation more than US$46 billion.[15]

Etymology[edit]

The name Xiaomi is the Chinese word for "millet".[16] In 2011, its CEO Lei Jun suggested there are more meanings than just the "millet and rice."[17] He linked the "Xiao" part to the Buddhist concept that "a single grain of rice of a Buddhist is as great as a mountain," suggesting Xiaomi wants to work from the little things, instead of starting by striving for perfection,[17] while "mi" is an acronym for Mobile Internet and also Mission Impossible, referring to the obstacles encountered in starting the company.[17][18] He also stated that he thinks the name is cute.[17] In 2012 President Lei Jun said that the name is about revolution and being able to bring innovation into a new area.[19] Several sources have linked the latter meaning to the Communist Party of China's "millet and rifle" (小米加步枪) revolutionary idiom[20][21] during the Second Sino-Japanese War.[22][23][24][25]

History[edit]

Xiaomi was co-founded by eight partners on June 6, 2010. In the first round of funding, institutional investors included Temasek Holdings, a Singaporean government-owned investment vehicle, the Chinese venture capital funds IDG Capital and Qiming Venture Partners,[26] and mobile processor developer Qualcomm.[27] On August 16, 2010, Xiaomi officially launched its first Android-based firmware MIUI.[28] The Xiaomi Mi1 smartphone was announced in August 2011. It was shipped with Xiaomi's MIUI firmware which is based on Android and resembles Samsung's TouchWiz and Apple's iOS. The device could also be equipped with stock Android.[29]

In August 2012, Xiaomi announced the Xiaomi Mi2 smartphone. The phone was powered by Qualcomm's Snapdragon S4 Pro APQ8064, a 1.5 GHz quad-core Krait chip featuring with 2 GB of RAM and the Adreno 320 GPU.[30] The company said on September 24, 2013 that the company had sold over 10 million Mi2 devices over the preceding 11 months.[31] Mi-2 smartphones were sold by wireless phone vendor Mobicity in the United States, Europe, United Kingdom, Australia and New Zealand.[32] On September 5, 2013, Xiaomi CEO Lei Jun officially announced plans to launch an Android-based 47-inch 3D-capable Smart TV,[33] which will be assembled by Sony TV manufacturer Wistron Corporation of Taiwan.[34] The company explained the choice as to take advantage of Wistron's skill as a supplier of Sony.[35] In September 2013, Xiaomi announced its Mi3 phone, with a version powered by the Snapdragon 800 (MSM8974AB) and another by NVIDIA's Tegra 4 chipset.[36] On September 25, 2013, Xiaomi announced plans to open its first ever retail store in Beijing.[37] By October 2013, Xiaomi was reported as the fifth most-used smartphone brand in China.[38] In 2013, it sold 18.7 million smartphones.[39] and 26.1 million smartphones in first half of 2014.[40]

In 2014, Xiaomi announced its international expansion outside of China with their first stop in Singapore. The international headquarters will also be set up in the city-state, which will coordinate all activities including future product launches in the region.[41] Xiaomi's Redmi and Mi3 phone made their debuts in Singapore on February 21 and March 7 respectively.[42][43] On March 7, Xiaomi Mi3 batches sold out within 2 minutes of the opening day sale in Singapore.[44] Following Singapore, The company has already landed in Malaysia, Philippines and India,[45] and also has plans to enter Indonesia, Thailand, Russia, Turkey, Brazil and Mexico in the following months.[46] On March 17, 2014, RedMi Note (also known as HongMi Note is some Asian markets) was announced by Xiaomi CEO Lei Jun. The RedMi Note features a 5.5-inch HD display with OGS technology and an octa-core processor from MediaTek.[47] There are two variants of the RedMi Note, one with 1 GB of RAM and 8 GB of internal storage; and the other with 2 GB of RAM and 16 GB of internal storage. The phablet was made available for pre-order on March 19 exclusively through a mobile application from Tencent.[48] In April 2014, Xiaomi purchased a new domain - mi.com for a record US$3.6 million. Mi.com becomes the most expensive domain name ever bought in China as confirmed by a senior executive of Xiaomi. Mi.com replaces xiaomi.com as the official website domain of Xiaomi.[49] In Q2 2014, Xiaomi shipped 15 million devices or 14 percent of China's market share and beats Samsung which only shipped slightly more than 13 million.[50] By July 2014, it had sold 57.36 million phones.[51] In November 2014, Xiaomi said it will invest US$1 billion in television content building. The investment is aimed at enriching the company's content and becoming a bellwether for the industry.[52]

In December 2014, Xiaomi completed its latest round of equity financing led by Hong Kong-based technology fund All-Stars Investment Limited, a fund run by former Morgan Stanley analyst Richard Ji[53][54] raising over US$1 billion proceeds with a valuation of more than US$45 billion, making it one of the most valuable private technology companies in the world.[55]

Business model[edit]

A Xiaomi Exclusive Service Center for customer support in Kuala Lumpur. A selected range of products is on display but purchase can only be made online.
Xiaomi's mascot, a bunny called Mitu

In selling the Xiaomi smartphone, Xiaomi employs a strategy that is very unlike other smartphone makers such as Samsung and Apple. Lei Jun, Xiaomi CEO, said that the company prices the phone almost at bill-of-material prices,[56][57] without compromising the component quality and performance compared to other premium smartphones.[58] To profit from the narrow margin, Xiaomi sells a model for up to 18 months instead of the short 6 months used by Samsung to profit from the fall in the costs of components that occurs over time. It also profits by selling phone-related peripheral devices, smart home gadgetry, in addition to apps, online videos and themes.[59][60] In the long term, the company sees the hardware sales just as a means of delivering software and services, as explained by Hugo Barra, "We are an internet and a software company much more than … a hardware company."[61]

To further reduce overhead costs, Xiaomi does not own a single physical store and instead sells exclusively from its own online store. It also did away with traditional advertising and relies on social networking services as well as its own customers to help advertise its products.[62]

Furthermore, by keeping a tight control over its stock, Xiaomi is able to place cheaper batch orders as demand dictates. Limited availability flash sales ensure that supply never outstrips demand and helps create a free marketing buzz around its products. On the other hand, traditional OEMs have to incur large upfront productions costs in order to ship smartphones out to retailers all around the world, some of which may not sell. This is far more expensive than Xiaomi’s model and it’s the consumers that end up paying the difference.[63]

In terms of building a strong and loyal consumer base, Xiaomi’s approach involves listening closely to customer feedback, having them test out upcoming features themselves, and building an extensive online community.[64] Lei Jun described it this way, "When I was with Kingsoft, I had the opportunity to work with Nokia and Motorola, 2 mobile phone giants of their time. One day, I pointed out to their R&D boss, some inadequacies. After that, they merely acknowledged my input, but never acted upon what I had said. So I thought to myself, if I make a phone, you can tell me anything you wish for it or what's wrong. If it is justifiable, we will work on it immediately. I'll give you an update every week and you may even see your wishes come true within a week."[58][65] In practice, Xiaomi's product managers dedicate a lot of time browsing through the company's user forums. Once a suggestion is picked up, it is quickly transferred to the engineers. Therefore features can turn from mere concept to shipping products in the span of a week. The company then ships a new batch of phones out every week on Tuesday at noon Beijing time, containing the new software builds and possible minor hardware tweaks. Xiaomi calls this process "design as you build."[66]

Finally, by making its operating system MIUI open for download on other Android phones, it has made Xiaomi’s apps and content more easily accessible, widening the potential to provide services to more users.[67]

The Xiaomi products are manufactured by Foxconn and Inventec.[68][69][70]

Xiaomi's mascot is a bunny wearing an Ushanka (known locally as a "Lei Feng hat" in China) with a red star and a red scarf around its neck.[71][72][73][74]

Products[edit]

Mobile phones[edit]

Xiaomi Mi 3
Xiaomi Redmi Note

Xiaomi's flagship mobile handset line is the Xiaomi Mi series. The newest model in this line is the Xiaomi Mi4, succeeding the Xiaomi Mi3.[75] It was initially launched in mainland China, followed by Singapore, Malaysia, Thailand and India on March, May and July 2014 respectively. The Xiaomi Mi3 uses a modified Qualcomm Snapdragon 800 and has been tested as the world's fastest Android smartphone according to benchmark testing apps Antutu, Quadrant and Geekbench.[76]

Another mobile phone of Xiaomi's is the Redmi Note which is a phablet and the second smartphone in the Redmi Series. In India, the Redmi Note comes in two variants, one with 3G, and the other with LTE.[77] In India, Redmi Note is available exclusively on Flipkart. The first flash sale of the Redmi Note was held on December 2, 2014, and all 50,000 units in stock were sold in a mere 6 seconds.[78]

The smartphone's software is based on MIUI, a closed source Android firmware based on the Android operating system. The latest flagship product of XiaoMi is the recently announced Xiaomi Mi4 at Xiaomi's annual product launch at Beijing on July 22, 2014, featuring a Qualcomm Snapdragon 801, 3GB RAM, 8Megapixel front camera, and a further optimized phone exterior.

It was reported that Xiaomi had ordered 50,000 sapphire covers from South Korean manufacturers, for a new premium smartphone. The limited edition may launch at the end of 2014.[79]

In an exclusive event in Beijing, China in January 2015, Xiaomi unveiled their new flagship phones Mi Note and Mi Note Pro to rival iPhone 6 at almost half the price.[80] Both devices features 5.7-inch display and uses a dual-glass design with a 2.5D front and 3D rear glass. Since its release, a number of US-based publications have dubbed the Mi Note "The best smartphone you can’t buy in America."[81][82][83][84]

MiPad[edit]

The Xiaomi MiPad is the first tablet to be announced by Xiaomi. First announced in the Xiaomi New Product Launch Event 2014,[85] the device is the first device to use the NVIDIA Tegra K1 quad-core 2.3 GHz processor with 2GB RAM[86] and it is on sale in mainland China at the price of CN¥1,499.[87] It is currently available in many online stores for under US$300.

MIUI (operating system)[edit]

See also: MIUI

MIUI is a stock and aftermarket Android firmware for smartphones and tablet computers based on the open-source Android operating system. It is Xiaomi's earliest known product.

MiWiFi (network router)[edit]

In April 23, 2014, Xiaomi announced a network router called the MiWiFi which is currently in beta and is available only to selected beta testers. It is said to have NFC support, a 1TB built-in hard drive and a Broadcom dual-core 1 GHz CPU.[88]

MiTV (Smart TV line)[edit]

The MiTV is a line of Smart TVs designed and marketed by Xiaomi. It runs Android and was initially announced in 2013. The latest in the series is a 49-inch Ultra HD Smart TV with a quad-core CPU sold with a soundbar mainly in mainland China at approximately CN¥3,999.[85][87][89]

MiBox (set-top box)[edit]

Xiaomi MiBox

The Xiaomi MiBox is a smart set-top box for televisions.[90] From deals struck with content providers, the set-top box offers films and TV shows with no user account nor subscription required. The box can also access content via its USB port, such as through an external hard disk. Due to content licensing restrictions, it is currently only available in mainland China.

MiCloud (cloud storage service)[edit]

MiCloud is a cloud storage and cloud computing service created by Xiaomi. The service allows users to store data such as contacts, messages, photos and notes on remote computer servers for download to multiple devices running MIUI. The service also includes a feature that allows users to track the location of their MIUI device as well as alarm, lock or reset it.

MiTalk (messaging service)[edit]

MiTalk is an internet-based cross-platform instant messenger mobile app available for Android and iOS launched in 2011.[91]

MiPower Bank (external battery)[edit]

A 10400mAh MiPower Bank

MiPower Bank is a battery charger with a built-in external battery. The charger is built with an aluminium case, and includes batteries rated at 5200/10400/16000mAh. Through the use of a USB cable, it can be used to charge any device that supports USB charging, including Apple iPhones, iPads, Android smartphones/tablets and more.[92] While the 5200/10400 mAh comes with a single USB port, the 16000mAh comes with dual USB ports, Xiaomi also released silicone casings for the 10400 mAh battery bank.

Mi Band (fitness monitor & sleep tracker)[edit]

Xiaomi Mi Band

The Mi Band was announced in August 2014. The Mi Band will be sold for US$13, has a reported 30-day battery life, can act as an alarm clock and tracks your fitness and sleep. The band also has the ability to unlock your phone based on proximity.[93]

Blood pressure monitor[edit]

Xiaomi launched a smart blood pressure monitor on September 24, 2014, in partnership with the Silicon Valley-based iHealth Labs. Xiaomi claims the blood pressure monitor is easy to use and meets all the necessary professional medical standards and certifications. The accompanying app, customized for Xiaomi smartphones, tracks blood pressure, heart rate, average pulse and more on a real-time chart, then makes recommendations for improvement.[94][95]

Air purifier[edit]

Xiaomi released an air purifier on December 9, 2014 in Beijing. This CN¥899 device has the capability to clean up to 406 cubic meters of air in an hour. The device uses HEPA technology to reduce polluting particles from as high as 600 ppm to a clean 2.5 ppm. The device has a real-time air quality monitor. Users can synch the air purifier with a smartphone to control it remotely, receive air quality data, and be altered when the air filter is dirty.[96]

Yi Action Camera[edit]

Xiaomi launched Yi Action Camera for 399 CNY ($64). It comes with a 16 MP sensor which can record 4k videos at 30 fps, 1080p videos at 60 fps and 720p videos at 30 fps. It is waterproof up to 40 meters.[97]

Recognitions[edit]

Xiaomi ranks No. 3 in the list of Most Innovative Companies 2014 by Fast Company, "for reinventing the smartphone business model in the world's largest mobile market";[98] No. 30 in the list of 50 Smartest Companies 2014 by MIT Technology Review, noting that "this Chinese startup could outmaneuver big companies in the coming smartphone boom in developing countries";[99] and No. 35 in the list of the Most Innovative Companies 2014 compiled by The Boston Consulting Group.[100]

Xiaomi's innovative business model has been characterized as a disruptive force to the existing smartphone industry by a number of commentators.[101][102][63][58][67][103]

Stratechery writer Ben Thompson notes in his article "Xiaomi's Ambition"[104] that Xiaomi's target consumer base is the young population of China, especially college students and young adults who just entered the workforce. As they get places of their own, they will need TVs, air purifiers, etc., things that Xiaomi sells along with the smartphones. He then notes:

This, then, is the key to understanding Xiaomi: they’re not so much selling smartphones as they are selling a lifestyle, and the key to that lifestyle is MIUI, Xiaomi’s software layer that ties all of these things together.

In fact, you could argue that Xiaomi is actually the first “Internet of Things” company: unlike Google (Nest), Apple (HomeKit), or even Samsung (SmartThings), all of whom are offering some sort of open SDK to tie everything together (a necessity given that most of their customers already have appliances that won’t be replaced anytime soon), Xiaomi is integrating everything itself and selling everything one needs on Mi.com to a fan base primed to outfit their homes for the very first time. It’s absolutely a vertical strategy – the company is like Apple after all – it’s just that the product offering is far broader than anything even Gene Munster could imagine. The services Lei Jun talks about – MIUI and Mi.com especially – sell the products and tie them all together, but they are all Xiaomi products in the end.[104]

Criticisms and controversies[edit]

Comparisons with marketing of Apple Inc.[edit]

Due to the design of some of Xiaomi products being highly similar to the design of Apple products, the brand has been unfavorably compared to American corporation Apple Inc..[105][106] In addition, the marketing strategy of Xiaomi is at times described as riding on the back of the "cult of Apple".[26] Moreover, after having read a book about Steve Jobs in college,[107][108] Xiaomi's chairman and CEO, Lei Jun,[109] has carefully cultivated a Steve Jobs image,[110] including jeans, dark shirts,[111] and Jobs's style of product announcements.[112] Given the above, he has even been categorized as a "counterfeit Jobs."[113][114]

The company was accused of copying Apple's philosophy and mindset.[115] Despite all these repeated comparisons to Apple Inc., Xiaomi maintains that it espouses a different set of principles.[26][116] In 2013, skeptics debated how much of Xiaomi's products were innovative,[112][117][118] and how much of their innovation was just really good public relations.[119] Others point out that while there are some similarities to Apple, the ability to customize the software based upon user preferences through the use of Google's Android operating system sets Xiaomi apart.[120]

During the Mi4 unveiling conference, the presentation slides used Apple's iconic "One more thing..." slide before introducing the Mi Band; it is the only English language slide in the whole 95 minute presentation.[121]

State Administration of Radio, Film, and Television issue[edit]

In November 2012, Xiaomi's smart set-top box stopped working one week after the launch due to the company having run afoul of China's State Administration of Radio, Film, and Television.[122][123][124] The regulatory issues were overcome in January 2013.[125]

Hugo Barra[edit]

In August 2013, the company announced that it was hiring Hugo Barra from Google, where he served as vice president of product management for the Android platform.[117][126][127][128][129][130][131][132] Barra has declined to comment on the timing of the Google relationships, and stated that he had been in talks with Xiaomi for over a year prior to announcing the move.[133] He will be employed as vice president of Xiaomi to expand the company outside of mainland China, making Xiaomi the first company selling smartphones to poach a senior staffer from Google's Android team.[134] Barra will focus on helping Xiaomi grow internationally.[135][136]

Privacy[edit]

Xiaomi's cloud storage service Mi Cloud stores all the user data in its servers located in China. There were also reports that Xiaomi's Cloud messaging service sends some private data like call logs and contact information to Xiaomi servers. To fix this issue, Xiaomi released a MIUI update that made cloud messaging optional. Now, no private data is sent to Xiaomi servers if the cloud messaging service is turned off.

In October 2014, Xiaomi announced that it was setting up servers outside of China for international users citing improved services and compliance to regulations in several nations.[137] Around the same time, the Indian Air Force issued a warning against Xiaomi phones, stating that they were a national threat as they sent user data to an agency of the Chinese government.[138]

Sales numbers[edit]

The Taiwanese Fair Trade Commission had investigated the flash sales and found that Xiaomi had sold fewer smartphones than advertised.[139] In December, 3 separate flash sales were investigated. In those flash sales Xiaomi claimed that the number of smartphone sold was 10,000 units each for the first two sales, and 8,000 units for the third one. However, FTC had investigated the claims and found out that Xiaomi only sold 9,339 devices in the first flash sale, 9,492 units in the second one, and 7,389 for the third. [140] It was found that during the first flash sale Xiaomi had given 1,750 priority ‘F-codes’ to people who could place their orders without having to go through the flash sale, thus diminishing the stock that was publicly available. The FTC fined Xiaomi NT$600,000. [141]

Ban in India[edit]

On December 9, 2014, Delhi High Court granted an ex parte injunction that banned the import and sale of Xiaomi products in India. This injunction was issued in response to a complaint filed by Ericsson in connection with the infringement of its patent licensed under FRAND (Fair, Reasonable and Non Discriminatory Licensing). This injunction issued by the High Court is applicable till February 5, 2015, the date on which the High Court has summoned both the parties for a formal hearing of the case. On December 16, The Delhi High Court granted permission to Xiaomi to sell its devices that are running on a Qualcomm based processor till January 8, 2015. Following this, Xiaomi held various sales on Flipkart on December 30, 2014, January 6, 2015 and January 13, 2015. All sales went out of stock in few seconds like the previous sales. In these sales, Xiaomi put their flagship devices Xiaomi Redmi Note and Xiaomi Redmi Note 4G on sale.

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