Xiaomi Showdown: Chinese upstart set to target high-end market with 'premium' metal handset

Posted:
in iPhone edited July 2014
Chinese smartphone maker Xiaomi -- known for its disruptive high-spec, low-cost Android handsets -- appears ready to make a move upmarket with the launch of an all-metal device after inviting members of the media to an event with invitations stamped from steel.




Xiaomi has dubbed the July 22 press conference "The Journey of a Piece of Steel," seemingly in reference to the milling and machining processes used to take steel from blanks to a finished product. As if to drive home their point, the company formed each invitation in the shape of a mobile phone case.

If true, Xiaomi's move could represent a play to take on Apple in Xiaomi's home market of China, where the company is already hot on the heels of Android market leader Samsung. Beijing-based Xiaomi is well-liked throughout the Asian nation for the value of its products, but -- unlike its Californian rival -- it is not considered a luxury brand.

Metal casings have become one of the primary differentiators for high-end consumer electronics in recent years, driven in large part by Apple's success with its trademark aluminum. They remain relatively rare in mobile phones, however, largely due to their high cost in comparison to injection-molded plastic alternatives.

Brand position notwithstanding, Xiaomi has made major advances in recent years, attracting both consumers and technical talent. With CEO Lei Jun often styled as "China's Steve Jobs," the company also snagged Android product executive Hugo Barra from Google late last year.




In a Monday morning note to investors, a copy of which was provided to AppleInsider, Needham & Co. analyst Charlie Wolf called out Xiaomi as the company best positioned to dethrone Samsung as the top Android smartphone manufacturer in Asia.

The money Xiaomi saves with its unconventional marketing and sales tactics -- including a heavy reliance on social media and internet sales -- is "plowed back into high-quality components while keeping retail prices down to around $270 for its top-selling brand," Wolf wrote. "Although sales are just beginning to move up, Xiomi [sic] has plans to invade most of the countries in southeast Asia and possibly some in Europe. Its biggest challenge likely will be to spread its brand in countries outside of China without breaking the marketing bank."
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Comments

  • Reply 1 of 55
    jkichlinejkichline Posts: 1,336member
    And now we know why the Chinese State Media was coming down on Apple...
  • Reply 2 of 55
    Quote:

    Xiaomi has dubbed the July 22 press conference "The Journey of a Piece of Steel," seemingly in reference to the milling and machining processes used to take steel from blanks to a finished product. 

     

    Steel & glass.  How very 20th century.

  • Reply 3 of 55
    gatorguygatorguy Posts: 21,264member
    Now I'm wondering if Hugo Barra leaving Google for Xiaomi was by a nodding agreement with Google, helping them blunt Samsung's juggernaut.
  • Reply 4 of 55
    sockrolidsockrolid Posts: 2,788member

    Originally Posted by AppleInsider View Post



    ... analyst Charlie Wolf called out Xiaomi as the company best positioned to dethrone Samsung as the top Android smartphone manufacturer in Asia.



    ... Its biggest challenge likely will be to spread its brand in countries outside of China without breaking the marketing bank."

     

    Those two sentences sum up Xiaomi's strength and weakness in a nutshell.  It's one thing to beat Samsung on their home turf.  It's another thing entirely to gain mindshare around the world.  That takes time and/or money.  Many years and probably also many billions of US dollars.  Good luck with that.

  • Reply 5 of 55
    Quote:
    Originally Posted by AppleInsider View Post



    If true, Xiaomi's move could represent a play to take on Apple in Xiaomi's home market of China, where the company is already hot on the heels of Android market leader Samsung.

     

    Yeah, hot on the heels alright.  If 5% market share versus 38% market share isn't "hot on the heels," I don't know what is.

  • Reply 6 of 55
    bdkennedy1bdkennedy1 Posts: 1,459member
    Having been in contract manufacturing for 5 years, this is simply lipstick on a pig. The Chinese simply don't have the work ethics and technological knowledge to compete with Apple.
  • Reply 7 of 55
    mpantonempantone Posts: 1,432member
    Quote:
    Originally Posted by TeaEarleGreyHot View Post

     

    Steel & glass.  How very 20th century.


    Steel is a great metal. At the same weight, it is much stronger than aluminum.

     


    From an environmental standpoint, steel is not as recyclable as aluminum.


     

    From a manufacturing perspective, steel is a more difficult material to work with than aluminum.

     

    Various Apple products are milled from a solid piece of aluminum because the metal is relatively soft; the waste material can be easily recycled at a fraction of the energy required to make new aluminum from bauxite ore. Apple does this because milling can result in a highly complex parts that aren't readily attained by other manufacturing processes like stamping or extrusion.

     

    As far as I know, Apple's steel parts (like the back of iPod classics, previous iPod touch generations) have never been milled from a single block of steel. This is why Apple has invested so much in their partnership with LiquidMetal: the ability to extrude or form complex shapes in alloys that are far stronger than aluminum.

  • Reply 8 of 55
    woochiferwoochifer Posts: 365member
    Quote:

    Originally Posted by Gatorguy View Post



    Now I'm wondering if Hugo Barra leaving Google for Xiaomi was by a nodding agreement with Google, helping them blunt Samsung's juggernaut.

     

    Yeah, and the timing of Barra's departure just happened to coincide with his fellow Googler girlfriend becoming Sergei Brin's mistress.

     

    http://nypost.com/2013/08/30/google-transfers-glass-staffer-after-billionaire-brins-mistress-outed/

  • Reply 9 of 55
    apple ][apple ][ Posts: 8,741member

    Good for them!

     

    This has very little to do with Apple.

     

    I fully support Android manufacturers going at each others throats. Let them all fight each other, while scrambling to pick up a few leftover crumbs. I fully support an Android civil war. 

     

    As for the phone itself, it's Android, so it doesn't matter if somebody makes an Android phone that is covered with real gems and diamonds. You're still stuck with a piece of junk.

     

    As for the CEO, he's merely a cheap Chinese imitation of Steve Jobs. How pathetic.

     

  • Reply 10 of 55
    tomdritomdri Posts: 18member
    Wouldn't it be interesting if it was waterproof and RUST just like the rest of the Chinese clones.
  • Reply 11 of 55
    SpamSandwichSpamSandwich Posts: 31,496member

    Hey, let Xioami branch out to the US market. They'll be pounded into dust by Apple.

  • Reply 12 of 55
    So what. It's still an Android.
  • Reply 13 of 55
    auxioauxio Posts: 2,035member
    Quote:

    Originally Posted by Apple ][ View Post

     

    As for the CEO, he's merely a cheap Chinese imitation of Steve Jobs. How pathetic.


     

    Sounds like he's a perfect fit for Android.

  • Reply 14 of 55
    boredumbboredumb Posts: 1,417member

    I'm not getting why they are characterized as "disruptive"…just for wanting to sell things?

  • Reply 15 of 55
    apple ][apple ][ Posts: 8,741member
    Quote:

    Originally Posted by auxio View Post

     

     

    Sounds like he's a perfect fit for Android.


     

    Copying, imitating, counterfeiting and IP theft is obviously extremely common in China, a country with few original ideas, but they don't stop there. Now Chinese CEOs even copy and imitate dead American CEOs. How much lower can they go?

  • Reply 16 of 55
    Quote:

    Originally Posted by mpantone View Post

     

    .... This is why Apple has invested so much in their partnership with LiquidMetal: the ability to extrude or form complex shapes in alloys that are far stronger than aluminum.


     

    Now THAT is truly 21st century tech!  :)

  • Reply 17 of 55
    rogifanrogifan Posts: 10,669member
  • Reply 18 of 55
    peter236peter236 Posts: 254member
    Strong Chinese competition from Xiaomi, Lenovo, Huawei, ZTE, Coolpad and others are now taking significant market share from Samsung.
  • Reply 19 of 55
    coolfactorcoolfactor Posts: 1,576member

    I am really surprised that Sony is not a bigger and more successful player in the mobile phone market.

  • Reply 20 of 55
    jungmarkjungmark Posts: 6,718member
    This is obviously bad news just for Apple. /s
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