More Than A Decade Has Passed Since The Initial Launch Of The Xiaomi Smartphone. During This Period, Xiaomi’s Innovations And Inventions Caused Significant Developments In The Smartphone Industry.
One of the main factors of Xiaomi’s success in this field was the production and supply of cheap phones to the market. This strategy made this company achieve significant profitability.
In 2011, customers looking for affordable smartphones did not have access to exciting options.
At that time, phones like HTC Wildfire, Samsung Galaxy Mini, and ZTE Blade were among the most popular options in the market because they were available to users at reasonable prices. Some Smartphones are equipped with robust hardware despite the low price.
We must go back a bit to understand how influential Xiaomi is in the smartphone. When Xiaomi introduced and launched its first phone in 2011, Nokia was still an influential player in the mobile industry, mainly because it had gained a significant reputation with the Symbian operating system. Samsung had just become the essential player in the Android ecosystem, and HTC was still in the market.
However, none of these brands had introduced and launched attractive and eye-catching phones at an acceptable and affordable price.
Democratizing hardware
Today, the smartphones launched in the market are primarily built on the concept of value for money. Smartphones have indeed been released to the market as foldable products. Still, the phone is mainly based on inventions and innovations paid attention to by the media, has high prices, and is more interested in users whose main criterion for buying smartphones is the latest product.
The market is available. When Xiaomi entered the smartphone market, everything underwent fundamental changes.
It all started with Xiaomi Mi 1. A device that turned heads with a powerful Snapdragon S3 processor, a gigabyte of main memory, and a high-resolution screen.
Xiaomi‘s main competitor was Samsung’s flagship Galaxy S2, which launched with similar specs, but the Xiaomi Mi1 was hundreds of dollars cheaper than its Korean rival. Since then, Xiaomi has defined its policy in which direction it plans to go.
Xiaomi is a pioneer in the development and production of affordable high-power phones.
According to the Android Authority website, Xiaomi was ready to enter international markets by 2014. With the introduction of Xiaomi Mi 3, the Chinese company succeeded in achieving its general formula of offering a device with a small profit margin.
Also, in a remarkable move, it made selling phones immediately through online stores a standard approach; At the same time, other companies set a specific date for the release of the phone after the unveiling of their phones; Xiaomi based its strategy on Instant sales established.
These two pioneering strategies helped Xiaomi reduce the seller’s profit margin and the costs associated with keeping a large volume of products in the warehouse. This strategy was so effective that Xiaomi sold 18.7 million Mi 3 phones in 2014, and within a few hours, all of the company’s phones were sold in international markets.
Xiaomi didn’t need a complicated business strategy or much time to dominate the Indian market. By 2017, Xiaomi became the most popular mobile brand in the lucrative Indian market by crossing the Samsung barrier.
Today, Xiaomi has a 21% share of the Indian mobile phone market and has taken first place.
Internationally, this Chinese company surpasses only Samsung and Apple and is the third smartphone manufacturer in the market.
The introduction of the Redmi and Poco series of devices allowed Xiaomi to significantly increase its sales of mid-range and budget phones and gain a larger share of international markets. Since then, Xiaomi has dramatically modified its business model; In addition to offering expensive flagship phones, it also sells phones through offline channels, so selling products from online stores is not the only source of income for this company.
Xiaomi’s strategy to offer smartphones through online stores is still an exciting idea and has been successful enough to become a model for new players such as Nothing.
In 2018, Xiaomi increased its profit margin after tax to five percent to ensure that it could maintain its competitive distance from its rivals. Of course, Xiaomi‘s profit path is not limited to smartphones, and the company uses other business strategies to increase its income.
Xiaomi’s big ecosystem
The Xiaomi company earns most of its income through the sale of smartphones. Still, in addition to the production of phones, it produces and markets various products such as lamps, vacuum cleaners, toothbrushes, televisions, and even smart shoes. Over the past decade, Xiaomi has created a vast ecosystem that includes hundreds of partner brands.
Xiaomi‘s efforts to expand its ecosystem began with the MIUI user interface. Xiaomi soon realized that focusing on software development could significantly increase its revenues. Just like the approach that Google took for the Android operating system, the Android user interface, and the software store, and was able to achieve significant profitability.
The fact is that Xiaomi doesn’t make much profit by selling hardware like big companies like Apple and Samsung, but by selling themes, cool backgrounds, ringtones, etc., in MIUI UI, it has made a significant profit. It is good to know that Xiaomi considers itself an online and internet-oriented company, not a hardware company.
It’s on the coin
Xiaomi‘s focus on software services has brought many benefits to the company, but along with its growth, it has also done things that have caused experts to criticize the company. The board of directors of this company placed a lot of emphasis on making money from software; for this reason, in a move that users criticized, it displayed advertisements in its software services.
The Chinese company began displaying ads across much of its software ecosystem, from default system apps to the phone’s lock screen. Xiaomi’s impressive success in selling ad-laden hardware products has led other software brands to adopt similar approaches. So, today, people who buy flagship phones of companies like Samsung are not safe from displaying advertisements in software.
Criticism of Xiaomi forced the company to take a break from advertising, but the company’s advertising strategy had a profound effect on the Android ecosystem.
Today, as in the past, Xiaomi does not widely advertise in the phones it produces and has largely distanced itself from its business policies of a few years ago; however, the excessive focus on the production and supply of application software, in which advertisements are considered a constant component, causes Some users to go to competing brands.
Xiaomi, with its advertising policy introduced into the Android ecosystem, caused users to have a bad attitude toward the Android operating system. Users aren’t happy to see ads on low-end phones, even when budget phones don’t show ads like they used to.
Earlier this year, Xiaomi faced a massive wave of criticism about the performance of its products, so much so that it had to respond to this issue in an official statement.
” Xiaomi uses temperature management strategies to ensure the optimal experience of its products, ” Xiaomi announced in an official statement. Especially for programs that have been used for a long time.
In most devices, we have three types of operating modes. These modes allow users to balance smooth device operation and energy efficiency at system levels.
This optimization is done to maintain the performance of programs and reduce energy consumption and temperature. In addition, Xiaomi refers to the application performance limitations that can be partially bypassed through internal performance modes called High Performance.
Xiaomi has made an undeniable impact on the Android ecosystem.
Xiaomi‘s work style in 2022 has many tangible differences from the company Li Jun founded in 2010. However, Xiaomi has not deviated from its traditional policies.
MIUI still underpins all Xiaomi smartphones, and the company’s ambitions to build a large ecosystem of connected smart devices have grown dramatically. This company intends to prepare a complete package of all the intelligent equipment that a smart home needs in the long run.
Of course, as expected, due to the presence of companies such as Realme and the subsidiary brands of BBK Electronics in the mobile market, there is intense competition in this market, so the strategies that Xiaomi works on were repeated many times by other companies.
Regardless of the business and revenue model that Xiaomi is based on, the fact is that no company has emphasized the production and supply of powerful phones at a reasonable price to the market like Xiaomi.
One of the factors of Xiaomi’s success in the mobile industry is the creation of powerful smartphones with features similar to flagship phones.
In the field of offering intelligent products to the market, Xiaomi takes steps based on the policy and strategies that Apple first introduced to the world of business and technology. Early on, Apple managed to turn products like Apple TV and Apple Music into a profitable cash flow after spending considerable time.
As we see today, most of Apple’s revenue comes from software add-ons and product subscription services, while Apple is known as a hardware company worldwide. Various companies have tried to copy Apple’s business model, but only a limited number of companies, such as Xiaomi, have succeeded in this field.
Following the Huawei ban, Xiaomi expanded its foothold in China more than before. In 2021, the sale of Xiaomi phones experienced significant growth, and this company was able to capture an essential part of Huawei’s market share. However, the sales growth rate of Xiaomi phones was short-term.
When Xiaomi shares went public in 2018, just eight years after its founding, it was valued at $50 billion, making it the third most valuable brand in the mobile industry. In general, we must say that Xiaomi‘s move to build a software ecosystem one step above hardware is the main difference between this company and its competitors.