Xiaomi Blown Away in its Own Turf, The Apple Effect

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January 28, 2015 by ...

Xiaomi got its doors blown off by Apple on its own turf. Over 36% of all iPhones sold in the world last quarter were sold in China. That number is almost fifty percent more than Apple phones sold in the USA. This is more remarkable based on the fact that iPhones in China retailed for up to $1300 or 25% the average annual income of all Chinese.

This has to ruffle the feathers of Xiaomi loyalists and Lei Jun as well. He just claimed that within one decade he and his would rule the roost. I don’t know what pipe he’s hitting off, but suspect a trip to Humbolt country or Thailand was the cause.

Apple gear costs four times as much as Xiaomi’s top end kit and still Chinese opted for the pricey fruit over the cheap veggie-millet. If Xiaomi has any hope of dominating the world of cells, they may wish to do something like, I dont know, maybe invent their own stuff?

I mean it would be a place to start, right?

One thing that many Chinese firms have yet to learn is that premium prices are the result of product differentiation. By this I mean stellar quality, design or some such thing. What I do not mean is peddling a mini-mi on the cheap.

Of course this logic does not hold true in China, but like I said, it is a closed market. The communist party declares winners and losers depending on how hefty their pockets are post-sit down. As a comsequence, firms with the commercial constitution of a birds nest are allowed to set abnormal prices for subpar goods. Anyone who has ever set foot in a Beijing apartment or watched a communist backed movie can attest to this truism.

The same can be said for Xiaomi. It’s blatant IP theft and failure to pay license fees allow it to save 23-30% on the former and untold millions on the latter. After all, if they had not ripped of Apple designs, would we even be discussing them? Gionee, for example, has its own tech and the world’s thinnest phone last year but nobody knows about it. Simply put, Lei Jun got where he did by stealing.

The result of this is that Xiaomi will not dominate cell phones, at least in the developed world because his phones are no better than Samsungs or Nokia’s. In fact, they are technically inferior to Sony. But writing about that company fails to excite the masses , so Xiaomi it is.

Ultimately the proof is in the pudding, however, if you think Xiaomi will dominate the world of cell, then explain to me how it is possible that Apple sold more phones in Xiaomi’s backyard even though their kit is three times as costly.

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