November 9, 2014 by ...
According to Canalys Xiaomi shipped 15 million phones last quarter. This is tremendous in absolute numbers but even more so when compared to same quarter sales last year- 4.4 million handsets.
Samsung was a big loser while shipping 2.3 million fewer units in y-o-y terms. Samsung’s profit also took a major hit dropping over 70% for the quarter as well.
Xiaomi selling cheap
While Xiaomi is now king of the hill in China, it is still a bottom feeder. Although it controls 14% of the market, all of its handsets are positioned at the bottom of the market, as is shown here. Unfortunately for them, this is where competition is the most fierce. Facing competition from the likes of Oppo, Lenovo, Yulong, BBK, ZTE, Meizu and Huawei, Xiaomi must compete on price.
This is an ‘E’ suite decision borne out of necessity. After all, how does one premium price a product which looks very very similar to an Iphone?
Lapping up the cream
Foreign players ate up 18% of the Chinese market and you can guess where they are positioned, at the top. Apple and Samsung occupy the high ground, even though Samsung is losing sales.
What most bothers Chinese manufacturers and Beijing is the dominant position of Apple especially. For years now the communist party has been on an anti-Apple tear and even allegedly hacked IOS to boot. That bad press has hurt Apple sales but they still run away with the majority of the made-in-China profit.
Xiaomi makes money on selling its gear, apps and other purchases and has given up on the high end. It would appear that Lei Jun is happy where he is at. Xiaomi is forecasting to sell 60 million handsets this year and 100 million the next. I guess Lei Jun follows the old adage of selling more for less and then making up for it with volume.