Xiaomi Battles To Reinvent Itself as China's Apple
Push into the premium smartphone market is a 'life or death' battle for budget brand. From a report: In February, Xiaomi founder and chief executive Lei Jun threw down the gauntlet to Apple and Samsung, vowing to make his company China's top-selling premium brand in three years. "[It's] a war of life and death," Lei said in a post on Chinese social media site Weibo. Xiaomi, the world's second-largest smartphone vendor, is a master of reinvention, making everything from rice cookers to e-scooters. If all goes to plan, the company will roll out its electric vehicle in 2024, ahead of arch-rival Apple. But as Beijing's tech crackdown takes hold, Lei is facing the potential for greater regulation at a time companies around the world are suffering from a global chip shortage. As China works to bring Big Tech to heel, Xiaomi's Hong Kong-listed shares have fallen more than 50 per cent from a year ago to about HK$12 (US$1.50). Its growth momentum also hinges on whether it can fend off its domestic and international rivals, said analysts. [...] According to former and current employees and industry analysts, Xiaomi's biggest hurdle to realising its goals of overtaking Apple and Samsung is convincing consumers of its high-end pedigree. Xiaomi, launched in 2010, made a name for itself building a loyal community of "mi fen," Xiaomi fans who bought products for the specifications, such as more advanced processors, at a cheaper price. While it ranks third in overall sales in China, it only holds five per cent of the global premium market, in which phones are priced at more than $400. "It will be difficult to defeat Samsung and Apple," said a former executive. "It does not play to Xiaomi's strengths, it doesn't have the brand power Apple and Samsung have, and they are not good at selling to people who don't care about specs." The company's phones have evolved. Xiaomi's 12 series phones, released in March and costing $749 for the most basic version, are designed to compete with Apple's $799 iPhone 13. As part of the launch, Xiaomi has pledged to open 20,000 more stores on top of the 10,000 they already have in China, and has changed the branding on its 12 series so they are no longer known by the "Mi" prefix that was the calling card of their previous hardware. But former company executives said the phones needed more than a name change. Xiaomi's previous attempts to break free of its budget image have ended in disappointment.
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