China’s Xiaomi was founded in 2010 by Lei Jun is a purveyor of sleek, affordable good-quality phones sold only on the Internet and promoted via social media to keep costs low. (Xiaomi is pronounced like “show” in shower, plus “me.”)
Xiaomi phones might not be the best products available, but they offer the best combination of good quality and very affordable prices, some analysts say. Phones are available from around $95 to $280, excluding carrier subsidies.
The formula enabled the company to tap into rising demand from growing middle classes in such countries as Indonesia, Brazil, Mexico, India, and China. And the formula has been effective.
Some analysts liken Jun’s company, valued at more than $40 billion, to Apple because of its intensely loyal fan base. Unlike secretive Apple, however, Xiaomi invites its fans to nosh on food at company parties, chat on Xiaomi’s online forums, and make suggestions for new features, which Xiaomi often adds to its software updates.
That fan base snapped up about 61 million phones in 2014, more than tripling the company’s smartphone volume from 2013, the company has said.
In the second quarter of this year, Xiaomi was the top smartphone vendor in China with 15.9 percent of all shipments, beating Apple and Samsung, Canalysis research shows. Globally, Xiaomi ranked fifth in shipments in the third quarter with 5 percent share, though that was down from the year-ago quarter’s fourth-place showing of 5.6 percent. Xiaomi, however, took fifth place even though it sold phones in only nine countries.
Now, the company is toying with the idea of tweaking its formula for the U.S. market, where it began this year to sell a limited number of phone accessories to U.S. consumers.
For now, the U.S. accessories consist of a 10,400 mAh power bank and a pair of headphones. An activity- tracking band and a 5,000 mAHh power bank are on the way.