Cellcos should be closely watching Xiaomi

Dylan Bushell-Embling
telecomasia.net
Fast-growing Chinese smartphone vendor Xiaomi has the potential to be a game changer in the worldwide smartphone market, and operators should be closely monitoring its progress, according to Analysys Mason.
 
Xiaomi has in just three years grown to become a top five smartphone maker in its domestic market, the research firm said
 
The vendor shipped 18.7 million smartphones in 2013 - making it China's fifth largest smartphone vendor by units shipped - and aims to sell 40 million this year.
 
Xiaomi follows the Amazon model of selling its devices for as close to cost as possible, and making money on software and services. This has allowed the company to sell devices with comparable specs to premium handsets such as the iPhone 5S or Galaxy S4, but at half or less than half the price.
 
While Xiaomi initially only sold its handsets in China, the company recently expanded into Hong Kong, Taiwan and Singapore. In each of these cases, the first batch of phones sold out in less than 10 minutes.
 
This is particularly impressive considering that Xiaomi spends nothing on advertising, focusing its marketing efforts on social media.
 
But despite Xiaomi's impressive early traction, Analysys Mason added that the company's impact on the global smartphone market is likely to be gradual.
 
The research firm said it remains to be seen whether Xiaomi's business model of relying on revenue from software and services can be sustainable in non-Chinese speaking markets, where Android services dominate.

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