By Paul Mozur
BEIJING-During the launch in September bombastic latest appliance Chinese smartphone maker Xiaomi Inc., followers with fluorescent bars and t-shirts shouted the louder company when the founder, Lei Jun announced its price.
Mi3 costs 1,999 yuan (U.S. $ 326), about half the price of the new iPhone 5C unsubsidized phone the economic model of Apple Inc. and devices with comparable features heavyweights manufactured by Samsung Electronics Co.
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Lei Jun, CEO of Xiaomi, with pets of the company.
has helped spur off the meteoric growth of the largest Xiaomi global smartphone market. In the three years since he founded the company Lei, Xiaomi has captured 5% of the smartphone market in China until the second quarter of 2013, surpassing Apple’s share, according to research group Canalys. The operator announced last week that it sold 100,000 models Mi3 in 83 seconds on your website.
Xiaomi aims to sell 20 million phones this year, compared to about seven million last year, the company said. “We reasoned as you do online,” said Lei, 43, in an interview. “On the Internet, the best products, which are used most often, are all free.’s E-mail is free, most of the content is free.”
“Through a free model can attract users faster,” he added. “So we try to sell our products (to a value) as close as possible to the cost of materials.”
Xiaomi has a value close to U.S. $ 10,000 million, according to fundraising round newer. Revenues amounted to about 12.650 billion yuan (U.S. $ 2,070 million) last year. His profile was raised a few days ago, when Chinese President Xi Jinping Lei included in a meeting with technology executives. The company, which is privately held, is owned by Lei, executives and outside investors. Xiaomi does not disclose its profitability, but some analysts say low margin hardware sales and demanding price competition in the Chinese market could make it difficult to make big profits in the coming years. “To have more credibility in the market to justify (his) measurement should start thinking about expanding into nearby markets hardware and software,” said TZ Wong, an analyst at research firm IDC.
Lei argues that the company makes money by offering services such as mobile applications and movies through its software, which is based on Google’s Android operating system Xiaomi Inc., which uses its website as the main sales channel, also offers a variety of accessories from batteries and multicolored bags to hats and even your pet rabbit dolls.
Xiaomi
??creates loyalty in part to constantly incorporate your suggestions Android version of their users and offer weekly updates. Lei said that Xiaomi notifies customers when implemented their suggestions for changes. “If you offer a suggestion and quickly incorporated, you will have a sense of accomplishment,” he says. “Once you fix it, have a strong sense of ownership and then tells his classmates, to friends, to everyone you know that Xiaomi is good” company. Xiaomi brand extends far beyond China’s richest cities to smaller regional centers, where their phones are often popular among young people.
Lei??public follows the example of the late Apple co-founder Steve Jobs. Often wears dark shirts and tops high-profile launches of the firm, as did the American entrepreneur. He says he does not want to be Jobs, innovate just like him. In part, the “Internet’s reasoning” that inspired the Xiaomi business model is based on 16-year career in Kingsoft Lei Corp., one of the pioneers of the software in China. Kingsoft Lei said that was sufficiently varied in directions adopted to satisfy their desire to try new things. After working in Kingsoft, Lei made a series of investments in companies in China, but three years ago says he felt the need to form a company.
a valuation of U.S. $ 10,000 million, Xiaomi current valuations exceeds cell phone manufacturers such as Nokia Corp. and BlackBerry Ltd. when materialized separate agreements to be acquired. In August, the company hired to Android Hugo Barra executive to develop their international business and assist in its cooperation with Google. Hiring generated speculation Xiaomi plans for international expansion, but Lei did not talk about the goals of the company. Anyway, says its products are competitive globally. “I think in many ways that we exceeded (Apple and Samsung),” he said. “We have some parts that are weaker than theirs, and some parts that are better.” Declined to give details, but added that the firm needs three more years to completely overcome their phones as to international rivals.
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