Xiaomi Mi TV

Xiaomi doesn’t do business like an ordinary smartphone company. Low-cost smartphone prices are subsidized by a wide range of complementary products and services, and the company looks to be expanding further into the smart TV business next. Xiaomi has just announced plans to invest $1 billion into online video content for its smart TV range.

Xiaomi launched its own smart TV last year and also has its own set-top box, the Mi Box, to bring content to other TV sets. Its TV range makes use of Xiaomi’s MIUI software and syncs up with other products, such as smartphones and tablets. Competition in the Chinese TV market is already fierce, with Alibaba, Baidu, Samsung, and Apple already competing in the 25 million yearly unit market. In order to catch-up with the market leaders, Xiaomi is going to need to provide content of equal, if not higher quality, which is where this investment comes in.

The exact plans for the $1 billion investment haven’t been made public, other than that it is designated for additional video content. The project appears to be aimed at China, but with expansion plans underway and new servers setup abroad, Xiaomi will likely want to rollout its new services to as wide of an audience as possible, perhaps in a following investment stage. We also know that Wang Chuan, the director for Xiaomi’s TV products, and Chen Tong, the recently hired former editor-in-chief from Sina.com, are overseeing the project, so there is plenty of experience behind Xiaomi’s TV ambitions.

With Xiaomi selling most of its hardware at or close to cost, services like this are essential for the company’s profit margins. Investing in the world’s largest smart TV market could turn out to be a good little earner.