Just weeks after Xiaomi overtook Huawei and LG to become the world’s third-largest smartphone maker, The Guardian reports that the Chinese handset maker’s chief executive and founder Lei Jun is out with a bold prediction that his company could move past Apple and Samsung to become the world’s largest smartphone maker within the next five to ten years.
Xiaomi has been making impressive strides within the smartphone market, taking advantage of the massive populations in its homeland China and nearby India as key regions for it success. Over the past few years, the four-year-old smartphone maker has recruited former Google executive Hugo Barra, more than doubled its sales following international expansion and even outsold Apple in China during the first quarter.
“I believe that no one thought the Xiaomi from three years ago, which just made its first phone, would later rank as the third largest player,” Lei said at China’s World Internet Conference in Wuzhen, after arriving two hours late. “India is becoming our largest overseas market. Within five or 10 years, we have the opportunity to become the number one smartphone company in the world.”
Xiaomi has quickly become known as the “Apple of China,” although that title might not have to do entirely with how popular the smartphone maker is in the world’s most populous country. Rather, the Chinese handset manufacturer has been called out on multiple occasions for nonchalantly copying the look and feel of the iPhone and iPad with its affordable Mi-branded devices.
“I’ll stand a little bit harsh, I don’t see it as flattery,” said Apple design boss Jony Ive when asked about Chinese smartphone manufacturer Xiaomi, described as “the Apple of China” in an interview with Vanity Fair. “When you’re doing something for the first time, you don’t know it’s gonna work. You spend seven or eight years working on something, and then it’s copied. I think it is really straightforward. It is theft and it is lazy. I don’t think it is OK at all.”
Despite the success, Xiaomi still has quite a lot of ground to make up on its competitors if it truly wants to be crowned the world’s largest smartphone maker. Apple and Samsung continue to dominate the market, combining to account for 37% global share in the third quarter. Meanwhile, Xiaomi sits in a distant third place with 5.6% market share for the three-month period.
Apple appears convinced that Xiaomi’s bold prediction is easier said than done.
“It is easy to say, it is more difficult to do,” Bruce Sewell, Apple’s general counsel and senior vice president of legal and government affairs, told the conference when asked about Lei’s bold claims which would require Xiaomi to displace Apple in second place, adding that there were “many good competitive phones in China.”
Nevertheless, Xiaomi is not alone in its fight for smartphone domination. Financial Times recently reported that Xiaomi has lined up $1.5 billion in venture funding as part of a valuation exceeding $40 billion. Russian internet company DST, which also backed companies like Alibaba, Facebook and Airbnb, is one of the investors currently in negotiations with the Chinese handset maker.
Xiaomi was founded in 2010 and launched its first smartphone in China in 2011. The handset maker shipped 18 million smartphones during the third quarter, compared to 5.2 million units in the year-ago quarter, and Lei projects that its user base will triple from 70 million to 200 million users in the next year. Expansion into new markets, including Asia and Europe, will prove pivotal to that growth.
“In this magic land, we produced not only a company like Alibaba, but a small miracle like Xiaomi,” Lei said.
FTC: We use income earning auto affiliate links. More.
Fragmentation.
Large doesn’t mean profitable. Unless they’re working on a unique operating system with its own curated app store then they’ll just be another Samsung, LG, Huawei or any other manufacturer depending on Google for an operating system and Qualcomm for SoCs.
Assembling iPhone look-alikes using off-the-shelf hardware and software is not a big deal, it will be just another Android manufacturer bubbling up to the surface for a short time. Then someone else will turn around and do the same thing. Volume doesn’t mean profit. Android market leaders will be swapping positions for the foreseeable future. Marketing to low end buyers doesn’t generate profits for either the company or the developers.
Instead of looking at market share look at profit share, that’s where you find the winners.
I wonder if China is watching the factories producing Xaiomi phones as closely as it’s watching the factories producing iPhones. I have a sneaking suspicion that would be quite a huge double standard in terms of child labor, worker safety and humane conditions.
Huh? Top Samsung and Apple in what way? Does the Xiaomi CEO think both of those companies are just going to be sitting around twiddling their thumbs the next few years. Those large companies are going to be tough moving targets. Getting off to a good start is fine, but pounding away year after year without misses is going to be tough. I’m not sure what Xiaomi’s R&D budget is but I’m sure it’s nowhere’s close to Apple or Samsung’s budget. It will definitely be easier said than done. Xiaomi is going to have to depend upon Google’s Android and the chip manufacturers and it’s going to be tough when Apple has it’s own OS and chip designs and will eventually have their own displays. I don’t know about impossible, but it’s not going to be easy to displace the first two heavyweight manufacturers. Apple makes more revenue in a quarter than Xiaomi makes revenue in a year.
Xiaomi doesn’t have R&D budget but rely on Apple or others to design for them. Next 10 years? too long. Google will close down Android with stricter usage.
No one said they had to be good devices. This will be just like all the other Chinese crap, Crap!
And by then Apple & the others will be onto some new technology that makes smartphones look like the first cellular “bag” phones.
No innovation – Just copying what other leaders have done!
Sorry, but Xiaomi brought out the colored Smartphones put in example, before the iPhone 5….. August, 2012
Apple copied Xiaomi in 2013 with iPhone 5c
Apple had multicolored iPod Minis, Nanos and Shuffles plus multicolored iMacs years before that and the Rainbow Apple Logo dates back to the 70s. Case color is a lesser innovation than display size, a truly goofy thing to even mention.
Apple copied Xiaomi? LOL…. sure. Is that the new joke now? Apple was making colorful gadgets back when we were all using flip phones. And colorful computers as well. Get over it.
@Nycko Heimberg
tu fais pitié avec tes trolls à deux balles…
Comme dis plus bas, ça fait des années qu’Apple fait se genre d’appareil… donc bon ta copie tu te la gardes mon petit fanboy. Peut être que tu ne connais Apple que depuis l’iphone, ça expliquerait toutes inepties et désinformation
I wonder how much control Google has over Android phones coming out of China, I suspect not much. Are they using Google Play or any Google services and apps? From what I understand there are many different app stores catering to android in the far east that Google has no control over and makes no money from. Not good for Google.
None of phones sold in China, including Samsung’s and other large manufactures’, is using Google apps. Due to a conflict between Google and China government, Google is not allowed to operate such a business in China. China government also banned most Google services, like Gmail and Google Maps, in China.
Then Google should close the damn source on Android and license the damn thing to see who will be impacted. Big guy like Samsung can pay for license, but little guy like Xiaomi, go bankrupt.
Copy your way to first place? It is an oxymoron. Like cutting your way to profitability. Where is the creativity and the ingenuity to understand what customers want before they even know? Xiaomi probably figures it will just hire creative people, pay them a bunch of money and wait for them to do creative stuff. Good luck with that.
I’d call that a little misleading. As a skin, MIUI is pretty nice and has been for a couple years now. I personally rooted my Optimus 2x a long time back just to use it. Recently, they have fallen prey to the “just copy Apple” mentality, and that’s a bit of a shame because they had a ton of very good ideas. There are still a bunch that are retained, and should they go back to their roots of doing cool stuff, then they really could do some very cool stuff again. Further, Samsung has been talking about getting out of the Android game for quite some time now and becoming a Tizen company. That would really open the door for a new #1 Android, and the question really comes up how much of Samsung’s recent success has been because of their product or because of the software that runs on their product.
I refuse to own a phone which name I can’t pronounce.
There’s a better reason for not using this phone: it’s really hard to use (for Americans) !
If they want to own the $25 android smartphone market, Apple could care less as long as they are sell 200-million unit $600+ smartphone market every year and make 80% of the profits.
Until their phones make it to the States or Europe and boom, they’re hit with law suits. I don’t see Xiaomi going anywhere outside China or Asia (not in Japan and Korea). Prepare to pay license for android because I believe within 5 years, android won’t be open source like currently is.
You are blind….
Xiaomi Mi 2 in 2012, Apple 5c in 2013….
It is Apple who copied Xiaomi.
They copied colors really.. Well the future looks bright for Xiaomi they innovated with colored cases, give us all a break.. Bye Bye Troll….
Shut up about colors you moron, nobody mentioned colors or gives a shit about the colors of their phones.
You’re the one who is blind. Apple was making colorful iPods long before 2012. And colorful iMacs back in the 90’s. Seems your memory or knowledge of the tech world starts in 2012.
2006…. multicolored iPods, lol. This is too easy.
http://photos.appleinsider.com/iPodNano7.101212.001.jpg
http://en.wikipedia.org/wiki/IPod
An iPod is not an iPhone…..
Xiaomi Mi 2 was announced before the iPhone 5 of 4 “.
Before Xiaomi and its Flashy colors, THE iPhone was always black or white or two-colored….
IPod Nano was presented after Xiaomi Mi2 with all its colors.
In August Xiaomi and September iPod Nano…..
they do make a higher quality product than either Apple or Samsung
“This just in! Xiaomi thinks it can top Apple and Samsung as world’s largest smartphone maker within a decade by imitating design, colors and marketing”
The Chinese have no shame…
If Shamesung is the biggest maker right now.
Shamesung will eventually be topped by the Shamesung of Shamesung.
Makes great sense to me.
Let’s see, we make everything over in China, they pay their workers how much, and the white collar types are constantly feeling unappreciated. So how much to pass information to a company?
No! Lenovo will be number 1! They will expand motorola to more countries and gain marketshare to knock samsung and apple off!
( I’m curious how project ara will do. Google should have a trial run next year.)
Lei needs to rethink what he’s saying and the products he produces. Stop copying Apple would be the first step. Him running around on stage with a black turtleneck won’t get him any sales. Copying Apple’s designs and commercial material won’t get him any sales either. It’s easy to copy, it is hard to do the R&D yourself and make something truly unique and different that people will actually want and love to use.
The Chinese copy everything, and there is little recourse to stop them. I have no doubt Xiaomi has a very good chance at becoming the biggest seller of smartphones (doesn’t mean biggest profits, Apple will keep that crown) because they will simply copy Apple and Samsung and HTC. While other companies like Apple do all the hard work to create new designs, Xiaomi will just copy it in a few months. And with a low price tag, that’s a recipe for massive sales.
For those laughing at this, I’ll take you back to the 1970s American auto industry. Japanese cars were junk, and America was at the top of it’s game. UK cars were terrible. Unreliable, hence you would see them at the side of the motorways – something you rarely see today, no matter the brand.
Forward to the 1980s and onwards, and Japan got it’s game together, and today, as they have for the last decade or more, Nissan and Toyota win every JD Power & Associates quality/customer satisfaction survey, and their sales reflect that. And as an owner of a 2002 Nissan X-Trail and Panasonic 4/3rds camera, I can testify to the build quality and reliability of Japanese anything. And some Samsung and LG gear isn’t too shabby either.
And now the Chinese are getting their game together, improving quality, entering future industries (every well known drone company is – wait for it, not American, but Chinese, Hubsan and DJI included), they even make pretty cool radio controlled aircraft for hobbyists (I just received mine from Hobbyking this morning, by co-incidence.)
Once China can INNOVATE too, they will offer a serious threat to all Western companies, who like Ford have done, will need to up their game too. (Ford work with Toyota in Freemont, opposite Silicon Valley.)
Apple have NOT innovated since the iPhone 2G. 6 is just larger. Same boring UX, just a brighter more responsive screen and (very) fast processor.
My LG G3 is way more innovative, and the Chinese will no doubt do the same.
Typed on a MacBook Pro 15″ Retina 1TG SSD – still the best laptop out there, so don’t think I’m bashing Apple, just ensuring people realise that no one should take their status for granted.
By the way, you might want to amend that. By the late 1960’s, Japanese cars were already in terms of quality already ahead of their American counterparts–when Toyota introduced the Corona sedan to the USA in 1967, Toyota sold everyone it could import to the USA because its reliability was way superior to any US car at the time.
But getting back on topic, I could see Xiaomi become a serious worldwide competitor if it decides to adopt a “stock” version of Android like what you see on a Google Nexus phone. And that has to really scare both Apple and Samsung down the road.
Interesting re Toyota. I didn’t know that. Agree re Android.
China and Japan have completely different attitudes toward manufacturing. In its heyday (different for different industries) Japan had (has) a reputation for quality. Still for cars, dropping for electronics. China makes a few high quality products, but by externally regulated, controlled companies for external markets and using mostly externally sourced components.
It’s not that they can’t, it’s just not in their nature. That’s why we know China as the world’s counterfeiter.
China may eventually change its reputation, but I don’t see it happening anytime soon. Xiaomi may be at the leading edge but I doubt it. They don’t have the semiconductor industry yet and at the end of the day, it’s still Android, owned by Google. Yet another Android phone, so what? When poking around the bottom of the barrel, who cares what’s floating to the top? Samsung, Xiaomi, Lenovo, etc., it doesn’t really matter. A number of companies producing similar products while trying to undercut each other on price. A cheaper, more cluttered reprise of the PC industry. How did that work out? The owners of the operating systems make the money, neither the hardware manufacturers nor country of origin matter much.
BTW, I don’t see Samsung remaining a market leader for much longer. They can’t afford it. I recently saw a profits graph of their electronics divisions and mobile devices were down to low single digits. The only electronics divisions that were making money (10-20% profit) were semiconductors.
Don’t get me wrong, they’ll still have a big presence but not what they’ve been enjoying the past few years.
They will never be greater than the ones they copy.
Their phones look nothing like iPhones. More like a cross between Lumias and Galaxies.
I think for Xiaomi to become really big, they’ll have to seriously consider dropping their current model of frequent phone operating system updates, popular as that is in China now.
I foresee Xiaomi phones sold in the Western world (e.g., USA and Europe especially) running a “stock” Google Android implementation, something akin to the “Google Play” editions of the Samsung Galaxy S or HTC One phones. That way, the phones will get the latest official versions of Android without having to wait for carrier certification (whatever that means).