Xiaomi censorship allegations may cloud its global ambitions, other Chinese smartphone vendors’ expansion plans
- Germany has started investigating Xiaomi’s smartphones, following Lithuania’s findings about the censorship capabilities of the firm’s devices
- The stakes are high for Xiaomi, which aims to become the world’s largest smartphone vendor in three years
“If the issue is contained in Lithuania, then the impact is small [for Xiaomi],” said Dan Baker, senior vice-president at Morningstar Research Services. “Lithuania only has around 3 million people.”
He indicated, however, that “if other countries, or even the EU, come to similar conclusions then the impact would be more significant for Xiaomi and the other key Chinese smartphone manufacturers”.
“Political tensions between China and the West play a critical role” in the cybersecurity investigations of Lithuania and Germany,” said Linda Sui, senior director of smartphone research at Strategy Analytics.
The rise of Chinese smartphones
The function at the centre of that report, however, is advertising management software, which is used to shield users from unwanted content including pornography, violence and hate speech, according to a Xiaomi spokesman. It is “common in the smartphone and internet industry worldwide”, the spokesman said.
Although “filtering advertisements is a more logical conjecture” in the case of the Xiaomi management software in question, “we need more prudence and investigation to determine what the [prohibited terms] list was actually used for”, said Tony Chen, a veteran programmer of Android smartphone systems.
The cybersecurity investigations by Lithuania and Germany also show that different countries have different compliance requirements. There will be differing opinions on smartphone functions from different groups within all countries, including China, according to Baker from Morningstar.
Germany is Xiaomi’s second-largest market in Europe, according to data from tech research firm Canalys. The country made up 10 per cent of Xiaomi’s total market share in Europe, with 9.2 million smartphones shipped in the first half this year.
In the same period, Xiaomi had a 45 per cent share of Lithuania’s smartphone market, according to Canalys. It said Lithuania accounted for just 0.4 per cent – about 400,000 smartphone shipments in the first half – of Xiaomi’s total European business.
“Putting more effort into the enterprise sector, which usually means coordinating with governments, may help these consumer electronic brands get an understanding of how to operate in a highly regulated environment and build trust,” Peng said.