December 4, 2014 by ...
Xiaomi makes fitness bands cum alien wrist identifier things. Aside from the less than sexy glob of plastic your beneficent author plods along with, I have yet to see a Chinese wearing one. According to Xiaomi, they sold over 1 million in just a few months. Being naturally accepting, I tend to question their sales data. Of course it is entirely possible that they have done so and by doing the math 1,400,000,000/1,000,000= not too many, but still you’d think I would have seen one, right?
Xiaomi’s trust deficit
Setting aside the fact that My natural predilection is to believe everyone, Xiaomi has me wondering. Not just the veracity of the claim that they sold 1 million fitness bands, but just about everything.
Xiaomi and the ‘truth’
According to Lei Jun, Xiaomi is an internet play. Selling phones is akin to a hobby. Lei says that they make no money on handhelds. ‘We are like. Microsoft, we monetize the intelligence inside the box or DVD, not the DVD itself. ” He went on to say that if you did not understand that, then you were clueless and failed to pass your ‘MiFanatics 101 course’.
Furthermore,’Quoth Mr Lei, ‘We sell hand sets at cost. We make no money on them. All of the value stems from what is inside and that is where the money is.’
Unfortunatley, Mr Lei spoketh with forked tongue. His bank accounts showed that Xiaomi is anything but an internet play, unless of course its an internet company which makes next to nothing on internet services and over 90% of revenue and profit on handhelds. But it is true.
The proof lies under these words- from here
An article here goes into depth about how Xiaomi is not a software play, as they like to profess. In fact, according to that website, 92% of Xiaomi profit comes from hardware. That is right, Xiaomi made $564 in profit from cell phones. This runs contray to Lei Jun’s claim that Xiaomi is an internet play, however.
The proof comes from a Wall Street Journal article based on leaked Xiaomi bank documents which show that the company had :
Revenue of $4.4 billion in 2013
$44 million revenue from service
Assume all services are pure profit so $44 milliom
= net profit from hardware of $520 million
= profit margin at least 12%
Ok so maybe Lei Jun told us a puny white lie. But does that mean we cannot believe him about MiBands?
Well, not only did Lei fib to us about that, but about root kitting and covertly swiping data from his phones as well. In fact, he claimed that it was a lie, then recanted, said they did it for our own good and finally said, ‘Ok we will move our servers outside of China.
Interestingly enough, it was shown that his Redmi Phones still swipe your data.
Ok, ok, so he told two kinda white lies, but is that really a problem?
Well, yes and yes. You see, the problem is that aside from telling us that he swiped no data, he also said his system had only been breached once and merely a handful of names were stolen. But then when a guy from Taiwan supposedly proved it had, Lei Jun had him muzzled.
Even worse, in this little legal document, Lei and crew said that the guy from Taiwan had dug up millions of names, not just a few.
Now that is more than just a tiny white lie, that big time bullshit.
And then again, we see Lei’s attitude during the whole data breach crisis. Once again, they denied, diminished and destroyed. Getting to the bottom of it all was never a concern. It would appear that failing to root himself into the truth is something he is comfy with.
Based on all this data, my bullshit meter hits a high note any time I hear claims like this from Xiaomi. In order to bolster their high tech cred, it seems as if they will do anything. Passing off a white lie as a mini truth seems to be par for the course and I am not having it. Until. I see the streets of Beijing filled with interplanetary plastic wrist lock looking things on their wrists like yours truly, I just do not believe them.