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Xiaomi battles to reinvent itself as China’s Apple

In February, Xiaomi founder and CEO Lei John threw the glove at Apple and Samsung, vowing to make his company the best-selling premium brand in China in three years. “[It’s] A war of life and death, “Lei said in a post on Chinese social media site Weibo.

Shiomi, the world’s second-largest smartphone provider, is a reinventing artist, producing everything from rice pots to electronic scooters. If everything goes as planned, the company will run it electric car In 2024, before arch-rival Apple.

But as Beijing’s technological explosion catches on, Lei faces the potential for greater regulation while companies around the world suffer from a global shortage of chips. While China is working to bring Big Tech to the heels, Shiomi’s Hong Kong-listed stocks have fallen More than 50 percent from a year ago to about 12 Hong Kong dollars (1.50 US dollars). Its growth momentum also depends on whether it will be able to fend off its domestic and international rivals, analysts said.

“Shiomi is on three racetracks, a smartphone, The Internet of Things And EV, all with challenges there from existing big players, “said Ivan Lam, a smartphone analyst at Counterpoint Research in Hong Kong.” But Shiomi insists on accepting everything. It’s going to be very challenging. “

According to former and current employees and industry analysts, Xiaomi’s biggest obstacle to achieving its goals Bypassing Apple And Samsung convinces consumers of its high pedigree.

Launched in 2010, Xiaomi has made a name for itself by building a loyal community of “mi fen”, Xiaomi fans who have purchased products for the specifications, such as more advanced processors, at a cheaper price. While it ranks third in overall sales in China, it holds only five percent of the global premium market, where phone prices are more than $ 400.

“It will be difficult to defeat Samsung and Apple,” said a former executive. “It does not contribute to Shiomi’s strengths, it does not have the brand power that Apple and Samsung have, and they are not good at selling to people who do not care about the specs.”

The company’s phones have evolved. The Shiomi 12 series phones, which came out in March and cost $ 749 for the most basic version, are designed to compete with Apple’s iPhone 13 worth $ 799.

As part of the launch, Shiomi has pledged to open an additional 20,000 stores out of the 10,000 they already have in China, and changed the branding of its 12 series so that they are no longer recognized in the “Mi” prefix which was the card mission of their previous hardware.

But former company executives have said the phones need more than a name change. Shiomi’s previous attempts to break free of its budget image ended in disappointment.

“Very few” have managed to create a Chinese “brand power,” the former director said. “Equity is a mature industry in developed countries.”

To capture the premium edge of the smartphone market, Xiaomi has pledged to invest Rmb100bn ($ 15.7bn) in research and development over the next five years.

Another tier of strategy is replication Book of Games in India by ShiomiWhere mass absorption of users has enabled the company to deepen its web services system, which is a growing part of its revenue.

The Internet services sector, which includes advertising in mobile and video games, fintech and e-commerce, accounted for 8.6% of sales last year, much of which was fueled by growth in overseas markets.

“After they became the first place in India, the company felt it had a strong playbook that it could replicate in other countries,” said another former senior executive.

“It was not very profit-oriented, it was about getting as many users as possible and then selling them as many internet services as possible.”

Xiaomi has remained limited because it does not have a standalone operating system. While the company has built its own Android-based system, known as MIUI, the company’s phones still rely on Google’s ecosystem outside of China.

“We use all sorts of ways to block traffic to Google and direct it to us. But that’s not the ultimate solution… Installing Google’s apps restricts traffic to our internal apps, and hurts our revenue,” said one employee.

But Lee has a window of opportunity to expand with its main competitor, Huawei, hit Extensive U.S. sanctions. In China, Lei is also protected by regulators who cut the country’s semi-technological gods, such as Alibaba’s Jack Ma. Down to size.

“Shiomi’s products face stiff competition and hence their products do not yield monopolistic or oligopolistic profits,” explained Wong Kook Hoi, Chief Investment Officer at APS Asset Management.

“The ability to create brand power for Chinese brands is difficult, very few have done so,” the former manager said. “[But Lei] He is extremely charismatic, he has a solid conviction in what he thinks is right. . . I will not be surprised if they succeed in doing so. “

Leigh’s battle is just beginning. When asked by Xiaomi what they want in the new car, consumers had an overwhelming preference: reasonableness.

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