Selling devices at cost and online-only seems to be a lucrative tactic for at least one Chinese manufacturer
Speaking at the D:Dive Into Mobile event in New York City, CEO of Xiaomi Bin Lin made some pretty bold statements about the expansion and plans for the company. Xiaomi, if you've never heard of it (we don't blame you), is a Chinese smart phone manufacturer that exclusively uses its own version of Android on high-end devices, which it generally sells at cost directly to consumers. Choosing to spend practically no money on marketing, sales or retail locations, Xiaomi has been producing phones with the highest specs and selling them for about $400 unlocked to Chinese consumers.
Now the company wants to expand beyond just China, Taiwan and Hong Kong. Lin expressed that Xiaomi is aiming to hit 15 million devices shipped this year, moving towards a global strategy to sell phones elsewhere. Could this model work in the U.S. and Europe? It's hard to say, as at least here in the states manufacturers generally rely on strong carrier partnerships and huge marketing pushes to sell devices. We'd surely welcome a new player that is willing to come in and mix things up, though.
Source: Engadget
Reader comments
Xiaomi aims to expand globally, ship 15 million devices this year
do these phones come with playstore in china?
I think no, but they do in Hong Kong.
Somebody help me pronounce their name?
I am not sure but I think it is "Shiaomi" . I was told xi is pronounced "she" ish.
You are correct.
Pronunciation wise
Xiǎomĭ
sounds like
"Che-oww-me"
I thought is Zi-o-me.
Posted via Android Central App
Pronounced somewhat like "She oww me"
"Could this model work in the U.S. and Europe?"
See Nexus 4
You didn't mention that Xiaomi's "custom version of Android" is the famous MIUI. Considering how popular MIUI is around the world, I wouldn't be surprised if they gain at least a marginal presence outside of China. I would buy a Xiaomi's phone in a heartbeat. They come unlocked and support dual-booting two versions of MIUI (and can probably be hacked to support other Android ROMs). I would have imported their M1 phone if I weren't on Sprint. Same with the M2. If the Dish merger goes through and they drop unlimited data, I may go to T-Mobile with either a Xiaomi phone or a Nexus.
(Nexus)
Soooo... if they're selling at cost, how do they intend to make any money?
They make hefty margins, like most, on accessories.
Easy, they make $$ by selling the info they collect about you! Just kidding, maybe it's just a way to make their presence known and get devices in peoples hands to garner some brand recognition. Once achieved they may modify their strategy and begin selling at a profit.
I'm guessing the real answer is: They're not really selling at cost but at a slim margin. Business don't plan to go through periods of zero profit.
You can't, by definition, sell at cost and not go bankrupt immediately. Companies have overhead (including the CEO's salary), and overhead is not, by definition, included in "cost".
Hmmmm...communist china and phones. How many ways can you say duhhhhhh, guess what, the chinese government will be monitoring everything you do. What kind of imbicile would buy anything owned by the communists. Remember, they're not our friends, they are just intent in assimilating us, they already control our economy and are yhe worst polluters on earth. Just buy their cheap crap and put everyone else out of business. Ship the rest of our jobs over there
Hey, I think you dropped your tinfoil hat over there.
YES!!!! But I already know that the phones are not going to be compatible with Sprint or Verizon