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Xiaomi outgrew rivals in Q2 2017; now back in the top-5 smartphone vendors club

About three years ago, Xiaomi was the most valued startup in the world at $45 billion — a distinction it earned within four years of its existence. In 2015, the tide turned, and Xiaomi ceded market share to fellow Chinese phone-makers Oppo and Vivo, which have sustained their progress until now. However, Xiaomi has bounced back, and how. In Q2 2017, it outgrew all its global rivals, and managed to re-enter the haloed ‘top 5′ smartphone vendors club, according to IDC data. Xiaomi grew its shipments by 59 percent in the second quarter to 21.2 million. It was followed by Oppo that posted a growth of 22 percent — less than half of Xiaomi’s.

Another Chinese manufacturer Huawei ranked third with a 19.6 percent yearly growth, while traditional giants Samsung and Apple had to settle for nearly flat, single-digit growth. Xiaomi is now the fifth largest smartphone vendor in the world. Interestingly, this impressive growth comes at a time when global shipments are down 1.3 percent to 341.6 million units. “Xiaomi’s range of Android models, such as the Redmi 4A, is proving wildly popular in India, snatching volumes from competitors such as Lenovo and Micromax… Xiaomi will be hoping the current momentum can be sustained into the second half of 2017,” Linda Sui, Director at Strategy Analytics, explains. ALSO READ: Samsung and Xiaomi battle it out for consumer and distributor adoption

What is spurring Xiaomi’s growth?

Experts reckon that it is a combination of good products and smart strategy. Xiaomi has identified its audience core in the world’s fastest-growing smartphone market, India, and is catering to it relentlessly. Its pocket-friendly Redmi series has disrupted India’s budget smartphone market, not only ending Samsung‘s reign in the sub-Rs 10,000 segment, but also obliterating domestic manufacturers like Lava, Karbonn and Micromax. Most recently, it helped Google revive its Android One system by launching the Xiaomi Mi A1 in India. It runs on stock Android Nougat, and is the first Xiaomi phone that doesn’t run on MIUI.

Besides offering fine products at throwaway prices, Xiaomi has made a smart shift to online-offline selling after initial years of minting the flash-sale model. Now, the company targets $2 billion in revenues from its offline operations, and has plans to set up 100 Mi Home stores in India in two years. This shift was imperative considering rivals Oppo and Vivo have already beefed up their offline channels. “[Xiaomi] has partnered with key large format retailers to increase its retail footprint. It has also doubled the number of service centers in the past six months as it continues with its strong below-the-line marketing activities,” the IDC report states. ALSO READ: Oppo, Vivo and other Chinese smartphone brands are slowly taking over the world

Xiaomi is also becoming more self-sustained now. It started to design its own processor earlier this year, thus reducing dependence on foreign manufacturers like Qualcomm. Its “Pinecone” chip set that was leaked on Chinese social media platform Weibo will feature an octa-core Cortex-A53 CPU. There’s another variant that will be a bit more powerful with four A73 cores and four A53 cores. It makes Xiaomi only the fourth phone-maker in the world, after Samsung, Apple and Huawei, to produce its own processor. “The ability to create its own chip sets is the pinnacle of achievement for any smartphone company. For Xiaomi, the move is an essential next step in our development,” Xiaomi Founder-CEO Lei Jun said at the launch.

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