Xiaomi co-founder and president Bin Lin talked about his young company on stage at D:Dive Into Mobile, revealing some of the secrets of its success as well as plans for the future.
Despite entering the smartphone business relatively late when compared to more traditional players, Chinese company Xiaomi made waves in China with its flagship Android devices selling at lower-than-expected prices in the region.
Consequently, the Mi-branded Xiaomi phones sold like hot cakes in the previous year, with the company unable to keep up with demand in the country. The company sold 7.19 million handsets in 2012 and aims to double that number to around 15 million in 2013.
The latest Android handsets unveiled by the company are the budget-friendly Mi2A and Snapdragon 600-powered Mi2S (image above).
In addition to China, Xiaomi phones will be available in Taiwan and Hong Kong and while Engadget says the company wants to “expand sales beyond Asia,” other markets have not been mentioned at this time.
Lin said during the interview that the company has no problems selling high-end devices at cost, revealing all smartphone-related details to buyers in the process. Xiaomi is able to keep demand high by offering high-end products that are sold at cost, even if that means it won’t make that much money off handset sales:
No sales, no marketing, no retail — we price our phones at the build of material.
So how is Xiaomi making money? By selling accessories for its handsets, which bring in “a good portion” of profits. But the company is apparently also focusing on Internet services rather than “on devices where margins will decline.”
Xiaomi sells its handsets via its online stores, ditching the need of partnering with local carriers to launch its products. And available stock usually sells out in a matter of minutes, although we’ll also point out that the company only sells a few hundred thousand Xiaomi smartphones at a time in a market that happens to have the most mobile users in the world.
High-demand for Xiaomi handsets has also led to an unwanted side effect that comes with such popularity, knockoff devices. Counterfeit Xiaomi handsets are already sold in the region – hardly surprising for a market like China where popular smartphones and tablets usually have their own fake version. But unlike with other knockoffs, “the sad part is that few people know these [counterfeit Xiaomi handsets] are fake.”
Speaking about Android, Lin said that going with Google’s mobile OS was basically a “simple” choice given what Android has to offer, but that the company would consider similar operating systems in the future:
“Android is fully open source, and it’s free. Choosing Android was simple. We have the luxury to make changes, so long as we retain compatibility with Android. If another operating system emerges that offers something similar or better, we’d consider offering that as well.”
While we have no idea when Xiaomi devices will be available in other markets, we’ll point those of you interested in buying one as fast as possible to our developing guide on how to purchase handsets from China.