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Xiaomi - Pitfalls on the Path to Glory

2015-02-20
this episode of Android Q&A is brought to you by Full Sail University so Shelby's received a lot of positive press lately and it's well deserved sleek design decent prices and better yet soon they're gonna start selling directly to consumers at least here in the West you'll be able to buy the phones online and sidestep the carrier but what could halt Yami's rise to glory let's talk about that all right let's get this out of the way first it's pronounced Xiaomi how do I know given here MQ Guevara VP of Xiaomi global my name is Benin I'm co-founder and president Yami the meteoric rise of Xiaomi has been generating plenty of headlines lately according to IDC shammies dominated the Chinese smartphone market in the last six months of 2014 beating heavyweights like Apple and Samsung as well as compatriots like Huawei and Lenovo for a company that released its first smartphone in 2011 sales of more than 60 million smartphones and evaluation of 45 billion dollars by the end of 2015 can hardly fail to impress now shammies number one possible pitfall is gotta be apples lawyers part of Shelby's rise in China can be explained by its early strategy of simply copying Apple if you can get past the similar aesthetic there are some very obvious differences between them show me clearly has a different attitude towards design customization and many other facets of its mobile device business but it has shamelessly aped Apple when it comes to marketing as Business Insider pointed out the CEO certainly seemed to be inspired by Jobs with his onstage presentations and quote one more thing slide but the company has also closely emulated Apple's marketing it doesn't just copy Apple it also uses copyrighted photos in its marketing all this is gonna get good now what gets away with this in China but it won't get away with it in countries with stronger IP laws if Apple could win in court against Samsung then Xiaomi has very little chance Microsoft and other Android OEMs also won't hesitate to have a go if they see an opportunity now the second possible pitfall is all this new marketing in the West could get lost in translation realistically Xiaomi will have to completely reimagine its marketing approach here in the West it has relied on close relationships with its fan base and more than a hundred million users enjoy weekly updates to a custom ROM it has made a huge deal out of listening to its customers and giving them what they want can it replicate this success outside of China Xiaomi recently boasted about 40 million active forum users and 500,000 new posts on a good day the fans drive the design the excitement and the hype word of mouth recommendations on social networking sites flash sales with limited stock reduce risk and generate more marketing buzz now in my mind personally this is the biggest possible pitfall for Xiaomi there is a big cultural chasm that they have to cross to market successfully here in the West and it's not just a Chinese companies Western companies have tried to go into China and had the same problem they just can't market their idea effectively because there's such a different cultural shift as someone who married into a totally different culture I can tell you even after you know 16 years in many ways we're still like like this it's hard to meet halfway and communicate in a way that both sides appreciate and value it'll be interesting to see how Xiaomi does it now some of you may be thinking hey Jase what are you talking about we got Sony Samsung HTC LG all these Asian companies that have done fantastic jobs in marketing of the West look at Honda and Toyota they're extremely popular here the most popular cars here than even our domestic cars yes but they've had decades to do that many decades and most of their marketing teams are Western so they've had the time to do that has Xiaomi had the time to do that they did hire Hugo Barra who was an executive at Google that was a fantastic thing but they need to do a lot more of that to make this cultural connection now let's talk about the next pitfall which is also possibly the greatest opportunity and that's selling their devices online only Xiaomi sells devices directly to consumers online it's a model that's accepted in many markets but the US and much of Europe is still dominated by carriers and long term contract deals it can be very tough for OEMs to strike deals with carriers if you want shelf space than they want to cut they want design input they want to put bloatware on the phone now even mother Google has had limited success selling its Nexus devices online even though the device itself is very successful the amount of sales that they've got online is still relatively small a smaller piece of the pie so show me was to be successful selling things online like this at scale they would be the first ones to do it now let's talk about those wafer-thin profits the lower cost of Xiaomi devices is an obvious attraction for many consumers but will Western markets bind to the accessories and app ecosystem they may ship with Xiaomi apps in China but worldwide Xiaomi is a Google partner and it's Android devices carry Google's apps and the Play Store can it hope to turn a profit without these additional income streams now the last pitfall is an ironic one because it's copycat competition ironically given the criticism often leveled at Xiaomi one of the biggest risks could be the competition copying it Huawei has already emulated the online-only approach with the honor line other than a head start in China what does Xiaomi have that other OEMs don't in terms of strategy given that it would be starting from scratch in the US how is it going to differentiate itself so what do you guys think what is Xiaomi secret to success here in the West love to hear it in the comments below now I know some of you out there are some pretty hardcore geeks and if you are hardcore and you love this stuff that much you may want to consider a career in 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thanks for watching android army my name is Jace love to connect with you right here on Google+ or Twitter I read all of them and respond to as many as I can you don't forget about my brothers my brethren in Android now last week I was talking about ashes the history of Nexus written with one of our Android authority staff I will link it up there it's right there right now cuz it's live when I talked about before it wasn't live I thought it was supposed to be but it didn't go up yet and you don't want to forget about the rest of my brothers over there I shall see you tomorrow for another Q&A see that
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