China’s #1 Smartphone Brand Xiaomi Targets 5 Million MiOne Sales This Year

It was mid-2011 when Beijing-based Xiaomi announced their first smartphone, the Xiaomi MiOne. Packed with a 1.5GHz dual-core Qualcomm SoC processor, 1GB RAM, 4GB ROM, 8 MP camera, 4-inch LCD, WiFi, Bluetooth, GPS (aGPS and GLONASS), and 1,900 mAh battery, the MiOne has caught Chinese consumers’ attention.

Pre-orders racked up around 500,000 devices in 36 hours, and sold more than 100,000 handsets in three hours when the smartphone was available officially in the market. At that time, the high-end device targeting the middle class was priced at 1999 yuan (about US$ 315), which is less than half the price of popular models from Apple and Samsung.

According to chinatimes.com, Xiaomi CEO Lei Jun has revised its shipment target for this year, from 2 million to 5 million units. Xiaomi has reportedly sold around 1 million of their phones as of January this year. As with its original strategy, the brand will sell only one new model, but with different colors and versions like its predecessor.

Functionalities and specifications are pretty similar with the iPhone 4S. The smartphone comes shipped with Xiaomi’s own MIUI variant of Android Gingerbread (2.3.5). Aside from MIUI (pronounced “mee-you-eye”), the phone also supports stock or “vanilla” Android ROMs, as well as other third-party ROMs like the CyanogenMod release popular among hackers and modders. The Xiaomi smartphone is likewise rumored to come with support for the Windows Phone 7 platform.

If we take a look the interface and the home screen, it seems that the MIUI interface has incorporated some elements and features of Apple’s iOS.

Partnerships With Mobile Carriers

Last December, Xiaomi announced a partnership with #2 mobile carrier China Unicom to expand its sales channels further by offering their phones at Unicom stores bundled with two- or three-year contracts. This March Xiaomi is planning to add another feather to its cap by launching the MiOne under China Telecom‘s CDMA network for US$ 317. More than 450,000 people have filled the application forms in the first 12 hours.

In a recent interview with Reuters, Xiamo president Lin Bin said that they were looking to raise more funds within the next year or two to boost production, and to increase revenue generation from apps rather than just smartphone sales. “Manufacturing a phone is very capital intensive; it requires a large flow of capital,” Bin says. “Within the next one to two years, we will have to select a time frame to raise and find suitable financing,” he adds.

The company, which was founded in 2010, and has 250 employees putting its focus on becoming a mobile Internet company now has been acknowledged as the. #1 Chinese smartphone brand, according to a Morgan Stanley survey.

Key Strategy: Sell Only One Product

Xiaomi only sells one model, which is a high-end product, but sold at the lowest price in China for such a device in its class. High quality components are obtained from the world’s top suppliers and providers. Handset chips are bought from Qualcomm, displays from Sharp and Toshiba, and camera lenses from Lite-On. The phones are assembled by Inventec and Foxconn. For the time being they are focusing on the Chinese market, and most of the handsets are available for online purchase, except those sold to China Unicom and China Telecom.

Last but not least, how about the reliability? According to Engadget, the phone has passed stress test in the lab that simulates two years worth of usage. “This is why we take much longer than Shanzhai factories to make a phone,” Jun stresses, highlighting their brands advantage over competitors.

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