Xiaomi recently announced that it would be launching in Ireland, in partnership with Three. As a result, we decided it best to give a breakdown of the company and its history, and why this is such big news.
What is Xiaomi?
Xiaomi is a Chinese company co-founded by Lei Jun and seven partners on the 6th April 2010. Google was heavily involved in the initial setup of the company, with the senior product manager for Google China being one of the partners. Only a few months later, Xiaomi launched its own Android-based firmware MIUI, which resembled Samsung’s TouchWiz and Apple’s iOS.
While many people may view Xiaomi as a hardware company, it is as much a software and internet company as it is anything else. While they may be best-known for their smartphones and various smartphone accessories, Xiaomi is also heavily involved in other areas of consumer electronics, such as smart home devices.
What makes Xiaomi so special?
What sets Xiaomi apart from the pack as a smartphone manufacturer is how insanely cheap their devices are. This is a result of several factors. Firstly, the company works with virtually no profit margin whatsoever, in some cases deliberately even making losses on their sales. This means they can sell smartphones with specs comparable to high-end devices from companies like Samsung and Huawei for a fraction of the price. The Pocophone F1, which we covered extensively, costs just €300, yet can keep up with phones like the OnePlus 6 and the Samsung Galaxy S9.
Secondly, Xiaomi operates what’s known as a vertically-integrated model, whereby Xiaomi actually owns their supply chain, as opposed to outsourcing manufacturing to other companies. This allows them to keep costs low by saving on shipping etc.
Thirdly, Xiaomi keeps most of its products on the market for longer than other top-tier companies; eighteen months instead of the more standard six. This allows them to take advantage of price reductions in key components, thus keeping costs low.
So how do they make money?
Despite operating at next to no profit margin, Xiaomi is still a very profitable company, with an estimated revenue of nearly €16 billion in 2017. A good portion of this comes from the software side of their operations. Former VP of Google’s Android division, and former VP of Xiaomi, Hugo Barra, described Xiaomi as an “internet and a software company much more than a hardware company. Xiaomi has its own app marketplace, as well its own music and video streaming services, Mi Music and Mi Video. In 2015, sales from the app marketplace netted the company $750 million.
Smartphones are the only product that Xiaomi sells at such low profit margins, with basically all their other products being sold at standard profit margins. This is where the majority of their revenue comes from. Things like earphones and power banks are available from Xiaomi, and they’re very good quality, as well as being very reasonably priced.
Tell me more about their smartphones
Xiaomi offers a wide range of smartphones, many of which can rival similarly-marketed models from OEMs such as Samsung. The Mi series is the standard flagship, comparable to the Galaxy S series from Samsung. The Mi Max is the equivalent of the Note series from Samsung, featuring large screens and big batteries. The Mi Note series is similar to the Samsung Galaxy A line; mid-range but still offering respectable performance. The Mi Mix series is Xiaomi’s more conceptual line of devices, featuring some – for lack of a better word – interesting design choices, a front-facing camera on the bottom right of the phone, for example. The Redmi series is perhaps what Xiaomi is known best for. They feature incredible specs for extremely low prices. For example, the Redmi Note 4x packed 4GB of RAM, a Snapdragon 625, and a 5.5″ full HD screen. All this came in at a price of €150. That is insanely good value. To put it in perspective, on a day-to-day basis you’d be hard-pressed to notice a performance difference between that and a current-generation flagship from another large OEM, and bear in mind that the 4x isn’t even Xiaomi’s latest offering.
Are smartphones the only things they sell?
Xiaomi offers many other devices alongside its smartphones, most notably a smartwatch, titled Mi Band. They also sell their own earphones. Xiaomi is also involved in other areas of consumer electronics, particularly in smart home devices. They have an air purifier, water purifier, and even a body composition scale which link up to an app on your phone to give you information about your surroundings and yourself. Most notably, Xiaomi also sells TVs and TV boxes worldwide. You can find their full product line here.
Why are they only coming to Ireland now?
In comparison to other tech giants such as Apple, Xiaomi is a relatively nascent company, only 8 years old. They’ve been slowly expanding throughout Asia for a number of years and as mentioned earlier, have stretched tentatively into Europe. Ireland is the next step, and Xiaomi has said they intend to launch in the USA in the near future, which will be an interesting move. Xiaomi’s past products and software bear resemblances to Apple’s, which could spell trouble for the Chinese company. This expansion has been slow due to the company’s relative inexperience, but has undoubtedly been spurred on by the massive success of their products worldwide.
Where can I get Xiaomi products?
If you’re looking for Xiaomi smartphones, they will be available through Three, who are partnering with Xiaomi for the Irish launch. The official launch is on November 1st, but details are still a little fuzzy. It’s unclear what phones will be launching, and if other Xiaomi products will be available. We’ll be covering the launch extensively here on Irish Tech, with a few of our writers attending the event, so be sure to keep checking the site for updates.
In the meantime, our sponsor, The Solution Shop, sells many Xiaomi devices, you can find them here.