Imagine a store that hasn't opened yet, but a line has formed outside containing hordes of smartphone fans waiting to get inside. Some of the people have been waiting for hours, maybe longer. Sound familiar? No, this isn't an Apple launch event. The eager fans are waiting to get their hands on a phone from Chinese smartphone maker Xiaomi, but looks could fool you.
Xiaomi may just be the biggest smartphone manufacturer that many westerners have never heard of, but they are a big player. Just recently they surpassed Apple to become the third largest manufacturer in China. This fact is even more significant when you consider the company is relatively young, having been founded in 2010 and having released its first smartphone in 2011. Xiaomi has come a long way quickly, and now they are setting their sights on the rest of the world – with plans to begin serious efforts in many new regions very soon. Expansion plans became even more obvious when the company hired Android head Hugo Barra from Google last year.
On the subject of expanding beyond China, Barra said recently:
"We're just starting to think about building truly, truly global products. I think Xiaomi's already good at that because of the mentality of some of the senior engineers. A lot of them have worked at Google or in Silicon Valley, and we have a bunch of ex-Facebook engineers. We have people with the global mentality. In a year or two, we're going to shift even harder towards building inherently global products. Whenever we think about a new feature, we try to think about it from a Chinese perspective and a global perspective."
The company's future wasn't always so sure, however, especially back when they started. When Founder and CEO Lei Jun first had the idea for the company investors weren't sure that yet another Chinese manufacturer could grab a significant portion of an already oversaturated phone market. The leading brands were in comfortable positions and the amount of money needed to have a fighting chance was substantial. But ultimately Lei's "crazy" startup idea would secure capital from the likes of investor Morningside Ventures, and even a little from Qualcomm.
Lei wasn't alone in this endeavor, having formulated the idea with Google Executive Lin Bin. When they first met, Lin was working on promoting Google's mobile efforts in China. Lei's interest in Lin was focused around mobile browser company UCWeb, a company he had invested in. The two eventually ended up discussing their own ideas and a friendship formed. The new friendship between Lin and Lei came at a good time as Google announced plans to reorganize its China effort. The reorganization, a result of China's growing censorship requirements on Google, seemed to Lin like a good point to try something else. It was at this juncture that the two decided to start a company together. They would make mobile software, and eventually also hardware as well.
The plan was to save money and leverage the internet as frequently as possible. A focus on the web caused them to decide to sell exclusively online to avoid giving some of what they made to their retail partners. The other wise move that they made was to use social networks for the lion's share of their marketing. Both these strategies would end up paying off handsomely for the new startup and achieve their goal of keeping the hardware cheap by avoiding unnecessary expenses.
Xiaomi produced the MIUI software first, making it available for download online in 2010. The custom Android firmware was released for free and would serve as the operating system for the company's future devices. There was a distinct focus in MIUI for common sense modifications and features, as well as user-friendliness. A distinct change that was made was the removal of the app drawer, which made MIUI looks notably more like iOS. MIUI enjoyed a generally good response and the software was quickly translated to other languages and ported to more devices by interested independent developers.
MIUI and the company grew quickly and products got better as the founding group of employees agreed to work from 10am – 10pm, twelve hours a day – for six days a week. A new version of MIUI was released weekly as a result. Despite plans to wait a year to produce smartphones the company began working on developing their first device earlier when they found they were not satisfied with MIUI's performance on other companies' hardware.
After bringing on talented Zhou Guangping, who had been behind the popular "Ming" line in China (produced by Motorola), the company began work on the Mi 1. The Mi 1 would be quite successful receiving more than 300,000 pre-orders in the first 34 hours after it was announced. MIUI had a lot of fans which helped bolster sales of the device, but the price was also quite good coming in at approximately $300 USD – much cheaper than many other smartphones on the market at the time.
The company had some growing pains in the early days, working hard to keep up with growing demand while also trying to focus on innovating and creating new products. The M1 would ultimately end up selling 15 million units, which one would imagine was a wonderful vindication of the company's strategy. More products would follow, leading us to the point we are at now with the leading products being the wildly successful Mi 3 and the new Redmi Note. The focus continued to be great prices (the Redmi Note goes for $200 USD), and good products, which has continued to work miracles for the company.
Now Xiaomi has caught its stride and is looking ahead with a great sense of ambition. Having moved beyond just phones and mobile software into a myriad of tech products such as TVs and tablets, the company shows no signs of slowing down with Lei now hinting at new product categories in home automation. There seems to be no limit to what the company is capable of and it's really just the beginning for what is still a young venture.
Moving forward it will be interesting to see what becomes of Xiaomi and whether or not its marketing focus on social networks, and cheap devices, will work in the rest of the world. But one would be wise to not discount the Chinese manufacturer preemptively, as only 4 years ago they were told they couldn't even break into the smartphone market. As for me, I'm eager to see what comes out of the company moving forward, and I'm not betting against them!