Two-year old smartphone maker Xiaomi builds more share in China than Apple

Two-year old smartphone maker Xiaomi builds more share in China than Apple
The smartphone market in China is growing at an exponential rate, and while growth continues worldwide, China and India are leading the pack with growth in triple-digit-percentages, while China alone consumes nearly as many smartphones as the rest of the world combined.

Apple has enjoyed great success with the iPhone, but one area where the iPhone has languished is in developing markets. The reason is simple, it is too expensive for median wage earners in those countries to afford.

In addition to price obstacles, Apple might have had more success in China if it were willing to develop a handset that worked on China Mobile’s proprietary network. After all, the world’s largest carrier has over 700 million customers which make an enticing target for any manufacturer.

Despite those obstacles, Apple has been able to remain as one of only two foreign companies to be on China’s top ten OEM list. One company that has propelled itself from “zero-to-hero” status in China is Xiaomi, who has now surpassed Apple in Chinese marketshare in the two-years of the company’s existence.

As you might imagine, the Xiaomi recipe for success is low price, high-spec hardware. We are not talking about in-house generic processors either. The flagship smartphones are sporting Qualcomm silicon, decent designs (and colors), at least a 720p display and 8 or 13MP cameras. A contender in any market right? Well these devices are impossible to ignore when they are between only $250-$400 off-contract. Prices like that make for a popular device and the Chinese know a good deal when they see it too.  In one case, its Mi2S Android handset sold over 200,000 units in just 45 seconds.

Another ingredient in that success is a closely held distribution channel. Currently Xiaomi smartphones are only sold in China and Taiwan. When you consider that the price point is also a driver for the growth of the market overall, Apple cannot get its affordable device, the iPhone 5C, in stores soon enough.

Will that be enough to fend off the explosive expansion of homegrown enterprises like Xiaomi, or bite into the giants that are Huawei and ZTE? Time will tell, but time is money, and money is precious.  It may be Apple's only opportunity to consider a “China specific” product going forward to keep in the running.

source: CITE World



1. TheLolGuy

Posts: 483; Member since: Mar 05, 2013

Apple, or any other manufacturer will never succeed in China. If and when any outside manufacturer starts picking up too much steam, China knocks them down a peg with articles like death by electric shock etc. Apple isn't the only target -- it's any international competitor. It's also how China snubbed Google and gave Baidu and Qihoo preferential treatment too. Thats not to say they're making some good products however. Companies like Oppo and Xiaomi do make good phones... It sucks for them, but it looks like the U.S. giants will have to look elsewhere. Who knows -- in time, China will probably have it's own widespread OS and keep suppressing external competition.

2. ZettaiRyouiki

Posts: 39; Member since: Aug 05, 2013

Because China makes stuff for cheap. And we all know how it's done. iPhones are for rich people there. Many average job earns a Chinese only USD $300-500 a month.

3. Maxwell.R

Posts: 218; Member since: Sep 20, 2012

Samsung's success goes against that template. Samsung latched on to China Mobile to help push equipment on the "new" TD-SCDMA network and will probably do the same with its TD-LTE build-out. However, you make a valid point, China likes to let others in just long enough to copy everything going on then insource to themselves.

8. rusticguy

Posts: 2828; Member since: Aug 11, 2012

Every govt does it .. what is US doing to Huawei? .. under the garb of National security? China does same against Google so what's the big deal ...

4. ianbbaa

Posts: 332; Member since: Mar 20, 2013

I thing Apple products sell fine in least those that looks "identical" from 2 meters. But Samsung also might see a bit of very nice fakes recently. I saw S4 last week that was exactly the same looking as my original S4. But "original" manufacturers like XIAOMI, OPPO are just out!!!

5. 1113douglas

Posts: 200; Member since: Jul 04, 2013

samsung is the best.. and will always be the best

6. chemhaz

Posts: 161; Member since: May 04, 2012

Chinese are also smart people, they can see past the shallow bling and low specs of an iPhone and pursue good value high performance devices.

7. Topcat488

Posts: 1419; Member since: Sep 29, 2012

The article said: "Apple might have had more success in China if it were willing to develop a handset that worked on China Mobile’s proprietary network." Apple thought THEY could dictate the "ins and outs" of every business deal. They were USE to it. Having their way, with the rest of the world... Not China.

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