Xiaomi’s Challenges
Xiaomi Technology, which nabbed third spot in smartphone rankings with low-priced phones, is now targeting the low-priced tablet market. According to overseas media outlets and industry sources on Nov. 26, Xiaomi will unveil 9.2" tablet PCs soon in the price range of US$100.
One ultra-low-cost tablet will have 1280x720 resolution displays, an Adreno 306 GPU, and a 1.2GHz quad-core Qualcomm Snapdragon 410 backed by 1 GB RAM. It will be able to store 5.8GB of data, and have 8GB memory and a dual camera. It is expected to be a WiFi and LTE-enabled product.
An industry source said, “When the technical specifications of the new model and the price of existing products are taken into account, the price of the tablet PC will be around 599 yuan (108,000 won, or US$98).” The source added, “It is likely to be launched early next year.” Experts are saying that the new tablet PC will exert a huge influence in the tablet market, since the model is similar to the iPad Mini in performance, but 25 percent cheaper.
The release of ultra-low-cost tablets by Xiaomi can be interpreted to mean that the Chinese company is aiming at becoming a major player in the tablet market using a high-spec and low-price advantage.
Xiaomi is running its own operating system MIUI, and the number of users is estimated at more than 70 million people. The Chinese tech firm is planning to feature MIUI in smartphones, tablets, and TVs, thereby increasing the number of users to 200 million by 2015 or 2016.
Xiaomi is already one of the largest tablet vendors in the Chinese market. According to market research firm IDC, the company started to sell its first Android tablet in July of last year, and became the third-largest tablet supplier in China in the third quarter of this year with a 7.6 percent share. The gap between Samsung Electronics and Xiaomi in market share is only 0.6 percent. The Chinese firm was able to jump to third place in the local market, only one quarter after it rolled out its tablets.
Countering Samsung by Establishing Manufacturing Bases in Emerging Economies
Xiaomi Technology is getting a lot of attention in the global IT industry, since it revealed that it will expand its production base to target emerging markets.
According to industry sources and overseas media outlets on Nov. 25, Hugo Barra, vice president of Xiaomi, had an interview with Bloomberg, saying, “Through partnership with Foxconn and FIH, we will be able to make products in India within one to two years, and Brazil sooner.”
The Chinese handset maker, which started to expand its reach to Southeast Asia late last year, has tried to enter ten countries this year, but met with little success in Thailand, Russia, Mexico, Brazil, or Turkey. The phenomenon is attributable to the fact that the company was unable to supply products to those countries, since there were no production facilities. Therefore, Xiaomi apparently wants to solve the problem through local production.
Xiaomi has successfully penetrated India, Singapore, Malaysia, the Philippines, and Indonesia so far this year, and India, the world's third largest smartphone market, has become one of the company's major markets.
The Indian smartphone market expanded 84 percent year-on-year in the second quarter, and the market is expected to grow 38 percent next year, according to market search firm IDC.
In fact, Xiaomi's low-priced strategy dovetails nicely with the fact that low-priced smartphones are quite popular in the Indian market.