14 DAY TRIAL // Without a shadow of doubt, Xiaomi is one of the fastest rising smartphone manufacturers in recent years.
A new report showed that the smartphone maker is responsible for eating away Samsung’s market share in China, but how did the company manage to outsmart the competition so cunningly?
Xiaomi does business like no other
The first idea that comes to mind is that Xiaomi is selling its phones at super affordable price tags. So you’re probably wondering why the competition doesn’t adopt the same strategy. Just slice off some prices and go from there, right?
But the equation is not all that simple. Have you ever wondered how Xiaomi manages to keep its smartphone prices so low?
Well, for starters, Xiaomi was built on completely different principles than other device makers. For example, they sell their products exclusively through online means, without relying on third-party retailers’ services or flagship stores.
This strategy is an immense cost saver, because the company doesn’t have to worry about sustaining a brick-and-mortar store (warehouse included).
But that’s only a tiny part of the big picture. In a recent interview with TechCrunch Xiaomi’s own Hugo Barra explains a thing or two about their products’ life cycle and why it matters to overall price.
Xiaomi products eventually end up costing a lot less
Xiaomi products tend to remain on shelves for 18-24 months, during which they go through three or four price cuts. That’s because as hardware components age, cost drops significantly, and in an industry as fast advancing as tech, aging is the topic du-jour.
On top of that, Xiaomi has a very limited smartphone portfolio compared to Samsung’s, something which allows it to better concentrate on the optimal strategy for each model being sold.
Last but not least, Xiaomi is not relying on fancy marketing campaigns to sell its products. The Chinese manufacturers rely on social media and word of mouth to attract the spotlight on their products.
So that’s the story behind Xiaomi’s success at maintaining its smartphone prices low and ruling the world; well part of it, at least.
