Xiaomi is on fire right now. For those who don’t know, Xiaomi is a smartphone maker exclusively in China. Like Google and their Nexus phones, the company sells their devices below their actual value and makes up the difference with their platform. How popular are they right now? They’re currently China’s 3rd largest e-commerce company and their latest release, the $130 Hongmi, sold 100,000 in literally 90 seconds and currently has over 7 million reservations. To put some context on that, the HTC One took a few months to sell 10 million units. The Hongmi nearly did it a few hours.
The company only asks for one thing in return. That is to not be compared to Apple. Xiaomi CEO Lei Jun recently did an interview with Reuters where Lei expressly states that Xiaomi is nothing like Apple. As Lei told Reuters:
If people really want to compare Xiaomi to a foreign company, you can say it looks a bit like Apple. But it’s really more like Amazon with some elements of Google. So take these three companies together and it’s easier to clearly understand what kind of company Xiaomi is. Xiaomi selling mobile phones is like Amazon selling Kindles. So you can understand why we sell them for so cheap.
As stated, they perform business like Google and Amazon wherein they sell their devices for cheap and make all their money off of their platform. For those wondering, they use an MIUI-based interface. Long time fans of MIUI can tell you how customizable it can be.
As Lei explains, Apple makes all of their money off of their hardware and very little off their software. Xiaomi differs from this because they make all their money off their software and, in some cases, actually lose money on their hardware. This all comes as a response to the media dubbing Xiaomi “China’s Apple.” Lei then goes on to point out that Apple’s software is a single solution for everyone while Xiaomi’s software can be customized by anyone and has thousands of designers.
If you have a minute, we’d love to hear your thoughts in the comments. Is Lei justified to say that they shouldn’t be compared to Apple?
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I think Lei is justified to say what he said BUT the average user isn’t going to look at how two different companies do business but yet look at the UI which is what they can see aka people are lazy and go for the easy stuff haha
With that said, the UI is more similar to Apple then it is to Amazon so I don’t think the comparison to Apple will stop.
I agree, I wasn’t thinking about what MIUI actually looked like when I wrote this, but you’re right it does look very much like iOS so the comparisons won’t likely stop for awhile.
I don’t think so. Like u and I, we all are average user, we can and we would like to compare those companies in marketing,designing and style.. we are not that lazy hahah
If I ever leave Android I’ll go Xiaomi
Xiaomi is Android ;) MIUI is a skinned ROM over top of Android. It used to be a really huge competitor to stuff like CM and AOKP for a long time but kind of fell off the map.
yeah because they started to be dependent on original stock roms.
I heard other rumors that regarded privacy issues and source code being withheld but I don’t know the full story, just the rumors :)
Oh I know, I use to run MIUI on my OG droid. If I ever leave the OHA Android Xiaomi will be the forked version I go to**** bad wording
Xiaomi is Android lol. It’s the popular MIUI ROM and devices, that are produced with MIUI as their skin.
Oh I know, I use to run MIUI on my OG droid. If I ever leave the OHA Android Xiaomi will be the forked version I go to****
Didn’t like xiaomi by the way isn’t xiaomi base on Android?
If only Samsung could get some of the designers from MIUI…
I’m curious about how they make money with software… MIUI?
App store and themes cost money
I see, but compare those to what amazon offer – so tiny, not sure selling hardware at loss for it really worth it.
I think the at a loss thing was only a limited time offer. It wasn’t much under any way. There are millions of miui users, and I think xiaomi does other things as well.
Its not justified. I had a MI2S this phone was too “apple spirit” that’s why i sold it..the call interface,the multitasking,no appdrawer. Everything inspired by IOS even the buttons of the phone. They have great hardware why they do this shit?..i guess chinese people like iphone. And by the way its really too heavy for a 4.3 inch.
Many asian countries, especially China, copy by nature. To them that is the normal way to do things. e.g. they will copy a chapter from a textbook and put their name on it, and they truly do not understand why that is inappropriate — they will say, “well I put it together” — in that they copied the text and stapled the papers together therefore it is “their work” thus, their name belongs on it.
It’s really hilarious!
Bit like the US a hundred or so years ago.
Apple make money from the software and the actual device though. They charge ridiculous amounts for the device then charge devs to publish apps, they will also take a lot of money from the app store and iTunes.
Well, in theory, if you just bought the iphone, downloaded only free apps, and used their services (mail, maps, siri, imessage, icloud), Apple would earn no more revenue from you, but have to pay to maintain those services.
You wouldn’t be unlocking the full utility of the phone, but it is certainly possible.
However also in theory, you could do the same with an Amazon Kindle, and in some way an Android device if you don’t connect to the internet.
That’s correct. However, I would point out that it is not cheap to run and maintain a curated app store, so collecting some commission to offset the admin costs is not unreasonable.
That has always been Apple’s business model. Charge you upfront for the hardware, you benefit subsequently from cheap software (where else can you find a fully-functional pdf annotator for $2?).
And that’s why Amazon and Google still don’t have much of a retail presence outside of the US, where consumers cannot access the full range of their play store services and offerings. If I want to buy a Nexus7, it would take 2-3 weeks to ship to me. Conversely, order an ipad mini online, and it gets sent to my doorstep within 1-3 days (at no additional charge, and with a no-question-asked and completely hassle-free 14-day return policy).
I suppose so but Apple’s app store is more expensive for consumers because devs have to charge so that their own costs are recovered. Apples app store is proven to be more expensive than the Play Store
I think it’s because they also know that consumers are willing to pay more for IOS apps.
Either way, I believe their content sales still makes up a small portion of their overall revenue. Benefits like being able to install the same app on up to 5 devices are simply hooks to get the consumer to purchase multiple Apple devices.
Which is also why we won’t see Apple products get cheaper anytime soon. It’s their business model.
That said, after doing some reading online, I still can’t find much on Xiaomi’s business model (beyond what I posted above). Their profit margin on their phones is quite slim – around 10% according to one unproven source. They are apparently trying to use their cheaper phones as a gateway to get people to pay for their services, like online shopping and gaming.
The closest analogy I can think of is like some Google+Amazon hybrid selling you cheap smartphones and tablets, then charging you to use their services. In that sense, I would say that their CEO’s example is quite apt.
I was wondering how Xiaomi makes a profit selling high spec, low-margin smartphones. With such a seemingly successful business model, you would think that every other manufacturer around the world would be rushing to ape their model.
Turns out the phones are a portal to their online services, which currently bring in 1% of their total revenue (but looks set to rise). I guess that’s where the “Amazon” corollary comes in. So you basically need to have deep pockets to develop your own ecosystem as well.
One thing’s for sure. If they ever come to the US, expect a head-on collision with Google, since their MUIU operation system is in essence an Android fork which replaces all traces of Google’s services with their own.
Does Google have a problem with Amazon’s fork? (Not sarcasm, a real question)
Also Google would have a problem with the fact that in the xiaominappmstore there isnanpirate version of Google play and play services and framework
I am pretty sure amazon’s forking of android annoys google to no end, considering how android was originally intended to serve as a gateway into google’s services (which in turn deprives them of ad revenue).
there is no doubt that they did a custom android fork like amazon did, and added in a bunch of apple ios-looking features. some things, like the settings panels, actually look much better in MIUI than in IOS. I actually like the miui system, it looks like a nice blend, unique to both OS’s by the custom fusion of their parts.
their business model is very much like amazon, so I guess overall they are really closer to amazon. But I can see why everyone locked in on apple, since everyone gets sued for using features that are similar to apple’s: it is the more edgy news blurb that you could say about them, and they apparently have a hit.
MIUI v4 and v5 are a lot like iOS. Like switching between apps in MIUI v5 is the same, as in iOS. Or the launcher approach, like not to have an app drawer, the browser, etc. But I agree with you. They kinda built their own little ecosystem on top of android.
Meh. . . iOS has become a lot like Android. . . so it is what it is.
iOS is a noob-proof version of Android.
Being like Amazon, meaning they take Android, remove Google’s elements and say: “screw you Google”
Shame on Amazon for using free open source software.
Has Amazon given much back to Android? If not, then yes, shame on them!
For sure he’s right… Who wanna be compared to a highly hyped brand… I understand that Mr. Lei knows that Apple brand is mostly about… brand. And for the most, IPhone’s users are looking more for a way to indentify themselves then for a reliable phone.
They’re not all like this, I know. But ask to an IPhone user about phone tech, and you’ll see…
Who wanna be identify as an IPhone, not me… Mr. Lei seem to be according…
totally wrong and biased. And this comes from a guy who love Android and is using a S3. If you talk about reliability, iphone comes first. It’s more stable and easy to use. Hence most iphone users are teenagers and seniors because they don’t wanna deal with hassles. What does “identify themselves” even mean? the iphone is like super common. 1 more thing, Apple is all about brand, yes and built quality.
Smart marketing. By telling everyone not to compare them to Apple, but Amazon it automatically makes them be compared to Apple and Amazon. Being mentioned with the popular names has to be nice, since they even get articles like this written about them.
Xiaomi knows what great design is!
then he shouldn’t dress like steve jobs at launch events