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A24 TECHNOLOGY
Monday 25 June 2018

Xiaomi: A Chinese startup out to challenge Google, Amazon

By YOUKYUNG LEE brand that has succeeded
AP Technology Writer abroad.
SEOUL, South Korea (AP) “Xiaomi is probably one
— Xiaomi, a Chinese cell- of the few Chinese com-
phone maker that helped panies that have gotten
pioneer the trend toward enough international at-
ultra-low-priced smart- tention not in a negative
phones, is preparing for way,” said Melissa Chau,
what would possibly be the associate research director
biggest tech initial pub- at research firm IDC.
lic offering since e-com- Admirers compare Xiao-
merce giant Alibaba’s in mi’s minimalist design to
2014. Apple or Japan’s Balmuda,
The 8-year-old is a star known for its sleek beauty.
among Chinese unicorns, It is also one of the few
a term that refers to start- hardware manufacturers
up companies that are that have been able to use
valued at more than $1 their hardware products as
billion. It has a dedicated an entry point to selling ser-
Chinese fan base and its vices and software.
media-savvy leader is an “If you think of other hard-
Asian celebrity. ware makers who do that,
But it is untested outside you can only think of Ap-
the region. In this Wednesday, June 20, 2018, photo, People try out the Xiaomi latest smartphones on display ple,” Chau said.
Can a Chinese company at the Xiaomi store in Beijing, Wednesday, June 20, 2018. In the letter to investors, Lei
be cool outside Asia? Can Associated Press said the eight co-founders
Xiaomi achieve its goal of “SHEE-YOW’-mee” — was flat or 10 percent growth our profits.” wanted to make “the cool-
expanding beyond hard- founded in 2010 by CEO or less in 2017, Xiaomi sales Xiaomi makes 90 percent est company in the hearts
ware to be an internet ser- Jun Lei and seven col- jumped 58 percent, ac- of its revenue from hard- of our users.”
vice company? leagues who included vet- cording to IHS. ware sales but calls itself an “Good companies make
A guide to Xiaomi and its erans of Alphabet Inc.’s Last year, the company internet content company. profits, great companies
upcoming IPO in Hong Google, Microsoft Corp. had a 6 percent share of It wants to make money by also win over people’s
Kong: and Motorola Inc. the global smartphone delivering services to the hearts,” Lei wrote. “We
___ Their first smartphone, the market, despite minimal more than 100 million users pride ourselves even more
WHERE DID XIAOMI COME Mi1 released in 2011, was presence in Europe and of its connected devices in being a technology
FROM? an instant hit with little mar- the United States. and 190 million people who company with a rare ‘fan
Xiaomi — pronounced keting. Consumers buzzed ___ use its software MIUI. culture.’”
about its low price of 1,999 HOW MUCH MONEY DOES ___ ___
yuan ($305) and competi- XIAOMI MAKE? HOW MUCH IS THE IPO EX- WHAT COMES NEXT?
tive quality. Xiaomi lost money last year. PECTED TO RAISE? But can it stir similar enthu-
It helped to ignite an un- A lot. The IPO is expected to raise siasm among investors and
usual fan culture on which The company reported a billions of dollars — possibly Western audiences?
Xiaomi has built its product loss of 43.9 billion yuan ($6.8 the biggest haul in the tech A key challenge will be win-
development. Customers billion) on revenue of 114.6 sector since Alibaba raised ning over U.S. and Europe-
take part in design deci- billion yuan. $22 billion in 2014 — though an consumers who might
sions by sending sugges- Even if the company turns forecasts of how much be more wary of Chinese
tions over social media. that around, CEO Lei has have declined. It aims to brands.
In 2013, Xiaomi sold more promised to keep prices raise as much as $6.1 bil- Another challenge is to
handsets in China than low for consumers by hold- lion in the IPO, Bloomberg show investors that, like
Apple. The next year, it be- ing profit margins on hard- and the South China Morn- Google or Amazon.com
came China’s top-selling ware sales to 5 percent, a ing Post said, citing anony- Inc., it can make a profit
smartphone. stance that might rattle in- mous sources familiar with from services, reducing reli-
The company later was vestors. the matter. ance on handset sales.
passed in sales volume by “Xiaomi is more than a “Compared to other Chi- Selling Chinese internet ser-
local rivals Huawei, Oppo hardware company,” said nese tech companies, it will vices to global consumers
and Vivo. But after a slump Lei in an open letter to in- be an attractive price point could be tougher than sell-
in 2016, Xiaomi’s growth vestors. “Although our for investors,” wrote Choi. ing Chinese phones.
rate outpaced other smart- hardware business is es- ___ Xiaomi founder’s vision,
phone makers in the follow- sential to building our user WHY ARE INVESTORS OPTI- however, echoes that of
ing year. While Samsung, base, we do not expect it MISTIC? many Silicon Valley internet
Apple and Huawei saw to be the main source of Xiaomi is the rare Chinese companies.q