Xiaomi May Take Samsung’s Crown
when we think of premium Android devices, Samsung usually comes to mind but the Korean manufacturer is in danger of losing its crown to a Chinese newcomer, Xiaomi. According to OpenSignal’s Android Fragmentation Report, Samsung's share of the Android market has declined from 47 percent in 2012 to about 38 percent in 2015. Samsung has dominated the Android market by flooding new Galaxy phones and tablets every year providing customers a variety of specifications and options. This strategy worked initially but their lead has eroded as the market has doubled in size and less expensive devices with similar specifications have come to market. The most recent Samsung Galaxy S6 has taken its design directly from Apple, which is a good thing as Samsung received a lot of criticism over the last few years about the build quality and materials in its flagship Galaxy S line but by improving the chassis they have done away with all the features (micro SD card expansion, waterproofing, and removable battery) that differentiated the Samsung’s flagship from the iPhone. As it stands now, the S6 resembles an Android version of the iPhone 6.
Xiaomi’s ascension has been unprecedented since it’s launch in 2010. The Beijing based company is now China’s largest smartphone vendor. Xiaomi is currently valued at $46 Billion by the Wall Street Journal; Uber is the only startup valued higher. Xiaomi’s successful business model is fueled by releasing devices with class leading specifications at lower price points than competing Android devices. Xiaomi keeps it’s costs down by using word of mouth instead of costly marketing campaigns and only selling through online channels. In just over four years, Xiaomi’s has built a loyal customer base only rivaled by Apple and Google. Finally, Xiaomi’s stands out by the use of social media to allow customers to directly work with engineers on features and issues. This constant refining and updating differentiates Xiaomi from every other smartphone manufacturer. Aside from Google’s Nexus line, most Android devices rarely get update a year after purchase.
Xiaomi needs to build brand recognition as it enters the US market. Samsung’s recent stumbles in the smartphone sector have opened the door for Xiaomi’s entry. Currently, you cannot purchase a phone on the recently launched US Mi.com store. Hugo Barra, Xiaomi’s VP of International, has publicly stated that infrastructure, certification, software, and other logistical challenges have kept devices like handsets and tablets from being brought to the US market. I suspect we’ll see Xiaomi’s Android smart phones and tablets for sale in the US by 2016.
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