December 10, 2014 by ...
Xiaomi’s piracy is legendary. Your humble author has written about this so much that his well-manicured fingers are whittled to the bone. In his humble opinion, Xiaomi’s IP theft was a disaster waiting to happen. Their ‘borrowing’ of ideas would catch up with them sooner or later. In his learned opinion, it would be the thing that precluded them from entering the U.S. Market, but boy was he wrong.
Recent news reports that as of now Xiaomi has been ‘injuncted’ from selling to India due to IP infringement/theft. Interestingly enough, it was not Apple who did the deed but Ericsson.
Xiaomi so new to international business and so problematic
Xiaomi sells about 98% of their phones in China. With so few international sales, one would think that Xiaomi would have a cake walk overseas, but they don’t. As a matter of fact, prior to getting kicked out of India, Xiaomi had alienated a handful of countries. And that was even before Xiaomi had whole-heartedly entered those places.
First off, China took a swipe at them for having the worst customer service for handsets in China. This was followed up with scathing reports that Xiaomi chargers made better blow torches or jet engines rather than power supplies. After the dust had settled on those claims, Beijing piled on by asking if Xiaomi was spying on mainlanders just like they did on the Taiwanese.
Yeah, Taiwan was upset to learn from a guy in Hong Kong that Xiaomi phones were stealing data. A Finnish firm then confirmed those reports and hell broke lose.
Subsequent to this, Vietnam warned against using Xiaomi and India told their Air Force that toting a Xiaomi phone was the same as painting a target on ones back. They considered a full ban. Taiwan, then said the same.
Singapore was upset with Xiaomi as well, but for another reason. Their Xiaomi users began to get sales calls from the Chinese mainland as soon as they used their phones. Word is that Xiaomi not only cc’ed Beijing on user message, pics and calls but may have been selling user data to subsidize costs. And now this.
India forced to stop importing Xiaomi?
The TOI reports that Xiaomi’s pilfering has Ericcson so upset that they have barred Xiaomi from selling into India. Not only have they sought an injunction, but want a blockade of the offending units. In other words they are refusing Xiaomi access to the market but being imported as well. I guess they want to wave off those big Chinese jets which Lei Jun used to ship his kit to China.
Small price to pay?
License fees can cost a company up to 30% of revenue. So far Xiaomi has skated on those costs and not paid a dime. Those days look to be over, however.
The good news is that the fine might not be that steep. According to the TOI, a local Indian firm merely had to pay a 1% royalty to Ericcson. No one is sure if that case was similar to this, but Ericcson has been warning Chinese firms about their intransigence too. It looks like those companies were used to Chinese ‘laws’ aka suggestions and considered themselves bullet proof. They forced Ericsson’s hand and now after selling more than 500,000 units in four months, they have to pay the piper.
Come back and I will update you as I find out more….