SMARTPHONES
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The Next Big Thing

Xiaomi's Lei Jun looking beyond smartphones to take control of your entire home

PUBLISHED : Friday, 06 March, 2015, 6:10pm
UPDATED : Thursday, 16 April, 2015, 11:30am

For Lei Jun, founder and chief executive of Xiaomi, one of China’s most influential technology start-ups valued at around US$50 billion and often called the “Apple of China”, the future for his company goes beyond just the smartphone market.

Already China’s largest smartphone maker, Lei's wants to take the technology a step further by enabling Xiaomi smartphones to connect to all home appliances so they are remotely controlled by the handset, he told reporters at the National People's Congress in Beijing on Friday. 

“Imagine when you put the smartphone on the desk at office or home, all electronic devices will automatically link to it. It will be an amazing experience,” Lei said.

There's only one thing standing in his way: convincing the Chinese government to set a national standard for all digital home appliance makers in order to make the internet, home appliances and digital hardware compatible with each other.

The digital home appliance market is expected to grow to be worth as much as 140 billion yuan by 2018, according to Lei, while there are now more than 400 million Chinese smartphone users. 

“It’s a great opportunity to combine the two,” he said.

Lei, who is an NPC delegate, proposed his idea during the meeting of China’s top legislation body this week, calling on the state to expedite setting a national standard.

He acknowledged that it will take time to convince home appliance manufacturers to work together, but he explained that this was why Xiaomi decided to invest in one of the mainland’s major home appliance makers, Midea, to gain their trust and make changes together.

“It does not mean that Xiaomi is going to become a home appliance maker. We are an internet company. Our ultimate goal is to build a platform based on a large number of clients and to deliver added value service through the internet,” he said.

Currently, Xiaomi’s five main products include smartphones, tablets, televisions, set top boxes and internet routers, said Lei.

Xiaomi sold 61 million smartphones last year, double its 2013 sales. Revenue in 2014 was around 74.3 billion yuan, according to Lei.

"Just five years ago we were a small internet company with a dozen of staff based in Zhongguancun. Look at us now. How much we’ve grown," he said. 

Xiaomi has a mixed reputation in the market due to its long record of copying foreign innovation and design ideas – including the Apple iPhone and Samsung's Galaxy smartphone line – and then selling such clones for incredibly low prices.

Analysts said it was vital that Xiaomi defend its fast growing valuation with innovation and expansion into other sectors. A partnership with home appliance makers would be an ideal way for Xiaomi to grow, said one commentator.

“Intellectual property issue is a serious challenge that all Chinese enterprises need to face when go abroad, including Xiaomi,” Lei said, adding that Xiaomi has own more than 2,600 intellectual rights patents and will own more in the future.

“From the beginning we believed that for Chinese enterprises to win the international market it has to use the best materials and to make the best product. It's in Xiaomi’s DNA,” he said.

Nevertheless, Xiaomi's "patent gap" is believed to be the reason it is not rolling out its smartphones to Europe and the US, despite entering those markets with fitness trackers and other devices. 

Lei is not the only Chinese business leader with a reputation for copying to talk intellectual property at the NPC; earlier this week Pony Ma Huateng, founder of Chinese web giant Tencent, called on the government to do more to protect companies from IP thiefs