One of the leading brand Xiaomi of China is set to start operations in India with the launch of slew of its smartphones at an event in New Delhi on 15th July. Xiaomi has already announced the launch of its latest flagship Mi3 smartphone at an attractive price of Rs. 14,999. Many tech experts are flabergasted with this price range keeping in view of the fact that Mi3 comes with hig-end hardware such as 5-inch 1080p IPS display(1920×1080 Full HD), 2.3GHz Qualcomm Snapdragon 800 processor, 2GB of RAM and 16GB of internal storage, 13-megapixel rear camera with dual LED flash, 2-megapixel front-facing camera, with capacity of shooting 1080p videos, and 3,050mAh battery.
Xiaomi makes several models of Android smartphones that have many of the same features as top phones from Apple and Samsung, but cost less than half the price. How they create this wonderful job? For this, NewYork Times (NYT) has given an indepth analysis of the business model of Xiaomi.
According to NYT, Xiaomi sells phones for about the same amount it costs to buy and assemble the materials. But it sells the phones for up to a year and a half, giving time for the components’ price to fall. Xiaomi also makes money from selling apps, games, special Android themes and Internet services. To lure customers and keep them loyal, the company offers a special version of Android, called Miui. Fans can help design Miui by giving feedback online, and the company releases a new version of the operating system every Friday to keep fans excited.
“Cellphones are really just like PCs were 20 years ago,” Lin Bin, one of Xiaomi’s founders, said at a business conference last year. “They generated big profit margins in the beginning. But those margins are in the single digits now. The same thing is beginning to happen to smartphones. So rather than focus on devices where margins will decline, we’re focusing on services.”
After the arrival of Xiaomi, it will be really alarm bells not only for its Chinese counterparts but also for established brands like Samsung and Indian handsets makers who will have to brace themselves to face the stiffest competition. It will be interesting to see tomorrow what Xiaomi has in store for Indian market and how aggressvie they would be in this large country. Stay tuned!
