Why Xiaomi’s new handsets won’t give it an edge in the smartphone market

Xiaomi’s new handsets might provide good value for money for customers, but analysts reckon they might not beenough to help the company close in on the world’s largest smartphone vendors.

The Chinese smartphone maker on Wednesday introduced two new successor handsets to its flagship Mi 5 smartphone model - Mi 5s and Mi 5s Plus. The handsets, which are going to be available in China starting September 29, cost relatively less than other high-end smartphones, but offer similar features.

The Mi 5s costs 1,999 yuan (US$299.64), while the Mi 5s Plus is priced at 2,299 yuan. By comparison, the suggested starting price for Apple‘s new iPhone 7 is US$649.

“The new phones look nice, but the problem that Xiaomi, and all of these vendors are facing, is that we’re seeing a slowdown in major innovations,” said Bob O’Donnell, founder and chief analyst at Technalysis Research, told CNBC’s “The Rundown“ on Wednesday.

“Everybody nowadays is bringing out slightly better cameras, slightly faster processors and other relatively minor improvements,” O’Donnell said, adding incremental features are not going to drive dramatic upgrades at a time when users were sticking to the same smartphone for a longer duration of time.

Xiaomi packed more power into the new handsets, with a new Snapdragon 821 processor; it introduced a larger 5.7-inch screenand a dual camera system comprising two 13-megapixel sensors for the Mi 5s Plus, while putting a Sony CMOS image sensor, usually found in compact digital cameras, in the Mi 5s for better quality pictures.

The stand-out feature introduced was the ultrasonic fingerprint sensing technology, which Xiaomi said could read a user’s fingerprint using ultrasonic waves when the user placed a finger on the sensor. This allowed Xiaomi to put their fingerprint sensor under the top glass of the phones, which eliminated the need for a ridge button or touch pad that is common in other handsets including the Samsung Galaxy S7.