Xiaomi is not “the new Apple”, it’s better. There are reasons why the company is doing so great, but we must keep clear that they are taking no tips from Apple. The Chinese phone maker has started a new way philosophy for making business in this competitive market, and that is what is taking them to the top.
We have gone through some of Xiaomi’s strongest points in the past. Many of these were all focused on keeping prices low, which Xiaomi is definitely king at. We definitely want to learn more, though, as we touched nothing but the surface before.
Xiaomi’s VP of International, Hugo Barra, has now gone on the record on how they can accomplish such feat, and we know exactly what is going on at Xiaomi’s headquarters.
Xiaomi keeps its portfolio very tight
We have mentioned in the past that one of Xiaomi’s key techniques is to not make more devices than it can handle. Xiaomi’s portfolio is relatively small, even if they do like venturing into new markets. Overall, they don’t have many devices in each category.
This allows them to spend less resources on research and upkeep. And because all of their devices are amazing, they don’t really need to bring successors as often, anyways.
Keep devices on the shelf for a longer time
In addition, Xiaomi is known for keeping its devices alive for longer. Even if they do upgrade them with improved specs, any model from Xiaomi stays available for purchase for 18 to 24 months.
“A product that stays on the shelf for 18-24 months — which is most of our products — goes through three or four price cuts. The Mi2 and Mi2s are essentially the same device, for example.” -Hugo Barra
“The vast majority of the components [in our devices] are still the same, so in terms of supply chain and component sourcing, we’re on the same supply contracts as Redmi 1, which means we’re still getting the same discounts on components. We can continue to ride the cost curve, so the importance of having a very small portfolio is significant — the fact that we only launch a few products each year, and (the fact that) we only have two product families.” -Hugo Barra
Support your devices!
Many other manufacturers support and update their devices for a very short period of time. This is partly because they are pushing out new smartphones so often, and they obviously need to move on and shift focus away from older phones.
Because Xiaomi has such a tight portfolio and keeps devices for longer, they also support them for longer. Updates come on a more regular basis, while spare parts and other services stay alive for much longer than other manufacturers would opt for.
They keep devices fresh for longer, meaning they don’t need to upgrade as much. It’s a cycle, in a curious way.
Harness the power of the internet
Traditional advertising is expensive… very expensive. A huge part of what you pay when you buy a smartphone goes straight to advertising. Xiaomi is able to cut the costs of traditional advertising by taking refuge in online advertising.
Promoting a product online is much more affordable and can reach a much larger audience if handled right.
Xiaomi can be considered a pioneer in this industry. They have adopted technology and business in a whole new way. So much that other manufacturers are starting to follow its lead now, including OnePlus.
What can we expect from Xiaomi in the coming years? Overall, more of the same. At least in terms of how they run the company. The main difference in the coming years is that Xiaomi is planning to boost its international presence.
It’s obvious they will need to adapt, but they are taking it slowly, as they always do.