Xiaomi targets larger share of China’s smartphone market
Handset maker sees plenty of room to grow its current 15 per cent share of the Chinese mainland market
Chinese smartphone maker Xiaomi is confident that it still has much potential in the smartphone market, despite an overall slowdown in Chinese smartphone sales, according to executives.
“The Chinese smartphone market is very large and has brought in tens of billions of yuan for Xiaomi,” said Liu Wei, senior marketing director at Xiaomi, who was speaking at Monday’s launch of the Redmi Note 3 smartphone.
The company declined to disclose its revenue for 2015, although chief executive Lei Jun said its revenue for 2014 was more than 74 billion yuan (HK$88.54 billion).
Data from research firm IDC shows that sales on the mainland last year increased more than 23 per cent compared to 2014.
“Even though we are No 1 in China, we only have 15 per cent of the total market share,” Liu added.
“There is still plenty of room for us to grow.”
Vice president Hugo Barra said at the event that Xiaomi had no plans to raise more capital, echoing chief executive Lei Jun’s comments earlier this month during the National Peoples’s Congress. Barra also confirmed that the company did not have any current plans to go public.
Xiaomi was valued at US$46 billion during its latest funding round in December 2014, making it the second most valuable start-up behind Uber, which has a valuation of US$51 billion.
The Chinese smartphone manufacturer is renowned for its affordable handsets, some of which have specifications that are comparable with Apple and Samsung’s flagship smartphones but at a price tag that is about 50 per cent cheaper.
Barra said the company is still able to make a profit with the low price-tag by selling directly to the customers through internet and large-scale manufacturing, despite the thinner margins.
“If anyone else were to make a similar phone [at a similar price as Xiaomi], they won’t make money,” he said.
Barra added that smartphone sales is still Xiaomi’s most significant revenue generator, but emphasised that the company’s mobile internet services, which include mobile games distribution and app store sales, are also growing at a rapid pace.
Liu echoed Barra’s sentiments, stating that internet services is already a major source of income in addition to Xiaomi’s smartphone and smart device sales. He declined to comment on the scale of non-smartphone businesses and further development plans.
Last April, chief executive Lei Jun said that he expected the company to make US$1 billion in revenue from internet services in 2015.
At the launch event, Xiaomi also unveiled the Redmi Note 3, which is part of the company’s Redmi line of mid-range smartphones, featuring big screens with a price of about US$150.
The Redmi Note 3 is packed with a Qualcomm 650 processor, a 5.5 inch HD display, and 1,600mp rear camera, making it the handset with the highest specifications in the Redmi product line.
It is also equipped with several features usually found on more premium models such as a fingerprint sensor, a full metal body as well as a 4050 mAh battery pack, which is more than double of iPhone 6s’ battery capacity. Prices for the Redmi Note 3 start from HK$1,299.
Redmi Note 3 will be available at its online shop and Mi home retail stores, as well as stores of local carrier CSL in Hong Kong from Wednesday.