Like Apple, the tech company that it aspires to be, China‘s
Xiaomi Corp like to launch new products to fanboys and press at events
that combine news, entertainment and geeky self-congratulation.
Tuesday’s event in Beijing was no exception. CEO Lei Jun
went on stage in front of a noisy crowd to talk up a new operating
system (V5) and the higher-spec Mi2S and Mi2A models of its current
smartphone. The other product launch was Xiaomi TV,
a set-top box that is finally on sale for just under $50 after months
of regulatory delays. Similar to Apple TV, it offers games, videos and
other Internet-streamed entertainment in China. Reporters covering
Tuesday’s event were given one to take away and try. Lei Jun, the
billionaire entrepreneur who cofounded Xiaomi in 2010 with a former Microsoft executive, also took the opportunity to announce that Android-based smartphones were going on sale in Hong Kong
and Taiwan, the first overseas foray for the closely-held company,
which sold 7.1 million phones in 2012. Two Taiwanese carriers have
agreed to carry the phone, while Hong Kong residents can buy direct
online.
Like the TV set-top box, phone launches in Hong Kong and Taiwan have been in the pipeline for months, suggesting that Xiaomi is fairly cautious, or possibly overstretched. Lei has raised over half a billion dollars in capital but appears in no hurry to take the company public. I profiled him last year for FORBES; you can read the article here. He’s also an investor in other Internet startups in China, including social-media app YY.com and fashion e-tailer Vancl. He often models their clothes during public appearances, such as Tuesday’s gathering. Up to 1,000 people crowded into a darkened hall in a conference centre on Beijing’s Olympics Green, many clutching Xiaomi phones. I counted some females, but the crowd was overwhelmingly young men. I spoke to several who rattled off praise for Xiaomi’s operating system and branding. Some took pride in the fact that a Chinese company was competing with multinational tech giants in the world’s largest smartphone market. Wu Xiangyu, a student from Guangxi province, showed me his iPhone 4 and the latest Xiaomi model. “I prefer the Android system, it’s much better,” he said. Another student said Android had more apps than Apple’s closed system, though he added that he never paid for any.
Apple has been roasted lately by China’s state media for its after-sales service. After a pointed silence, CEO Tim Cook issued a public apology last week to Chinese consumers for not heeding criticism (quickly dubbed an iKowtow). Opinion is divided on what this all means for Apple; China is its second-largest market after the U.S. so image and reputation matter greatly. It’s hard not to see politics at work behind the attacks, given the frustration of Chinese telecom-gear makers ZTE and Huawei in accessing U.S. markets and the reality that Apple is making huge profits in China. Xiaomi would never come out and say it, but a setback for Apple in China is good news for other smartphone makers. Samsung probably has the most to gain from any dent to Apple’s sales. As for Xiaomi, its smartphones are priced at RMB1,999 ($322), which is considerably cheaper than an iPhone or Galaxy S4. Its biggest challenge is avoiding a price squeeze by cheaper phones churned out by the likes of ZTE and Huawei.
Still, to Jiang Lishi, a 22-year-old female student that I met at Xiaomi’s product launch, there’s no substitute for an iPhone. She bought a Xiaomi phone last year, but it was stolen. Now she has an iPhone 4, a gift from her father. While she had no complaints over her old phone’s performance, there’s no turning back for her. “This iPhone makes me look much cooler,” she says, giggling. “It’s cool to have one.”
Like the TV set-top box, phone launches in Hong Kong and Taiwan have been in the pipeline for months, suggesting that Xiaomi is fairly cautious, or possibly overstretched. Lei has raised over half a billion dollars in capital but appears in no hurry to take the company public. I profiled him last year for FORBES; you can read the article here. He’s also an investor in other Internet startups in China, including social-media app YY.com and fashion e-tailer Vancl. He often models their clothes during public appearances, such as Tuesday’s gathering. Up to 1,000 people crowded into a darkened hall in a conference centre on Beijing’s Olympics Green, many clutching Xiaomi phones. I counted some females, but the crowd was overwhelmingly young men. I spoke to several who rattled off praise for Xiaomi’s operating system and branding. Some took pride in the fact that a Chinese company was competing with multinational tech giants in the world’s largest smartphone market. Wu Xiangyu, a student from Guangxi province, showed me his iPhone 4 and the latest Xiaomi model. “I prefer the Android system, it’s much better,” he said. Another student said Android had more apps than Apple’s closed system, though he added that he never paid for any.
Apple has been roasted lately by China’s state media for its after-sales service. After a pointed silence, CEO Tim Cook issued a public apology last week to Chinese consumers for not heeding criticism (quickly dubbed an iKowtow). Opinion is divided on what this all means for Apple; China is its second-largest market after the U.S. so image and reputation matter greatly. It’s hard not to see politics at work behind the attacks, given the frustration of Chinese telecom-gear makers ZTE and Huawei in accessing U.S. markets and the reality that Apple is making huge profits in China. Xiaomi would never come out and say it, but a setback for Apple in China is good news for other smartphone makers. Samsung probably has the most to gain from any dent to Apple’s sales. As for Xiaomi, its smartphones are priced at RMB1,999 ($322), which is considerably cheaper than an iPhone or Galaxy S4. Its biggest challenge is avoiding a price squeeze by cheaper phones churned out by the likes of ZTE and Huawei.
Still, to Jiang Lishi, a 22-year-old female student that I met at Xiaomi’s product launch, there’s no substitute for an iPhone. She bought a Xiaomi phone last year, but it was stolen. Now she has an iPhone 4, a gift from her father. While she had no complaints over her old phone’s performance, there’s no turning back for her. “This iPhone makes me look much cooler,” she says, giggling. “It’s cool to have one.”
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