After getting immense initial success, the Chinese manufacturer Xiaomi has finally slowed down. In the first quarter of 2016, the shipments fell down to 10.6 Million smartphones leading to a 26 percent decline in smartphone sales for the company when compared to the same period last year. However, there is a major shift in the company’s strategy and it is making a fast move towards IoT (Internet of Things) based devices. The Mi Ecosystem which is a group of 55 startups Xiaomi has invested in or has incubated marks this move. These companies are involved in manufacturing everything right from air purifiers to drones.
This move has lead to various speculations, most common being that the company is making this shift into home appliances because of diminishing sales. But, according to Hugo Barra’s insistence, the company is ”not becoming the next Samsung.”
This essentially means that the company has no plans of manufacturing all types of appliances just to make up for the dip in the sales. “We think of our business as a platform and the three main pillars of that are MIUI operating system, e-commerce business, and hardware,” Barra told ET.
“We sell all these diverse products directly to our consumers and stand to make a profit for ourselves and the original device manufacturers. But having said that I would like to reiterate that we are not becoming the next Samsung in terms of manufacturing all kinds of consumer electronics, rather we are more focused on IoT products. Since we are not into air conditioners, microwave ovens, fridges etc, we embed our wireless chips inside most third party home appliances so that they can communicate and send data back to our platforms as well,” he further stated.
Some of the major companies where Xiaomi has invested in includes Zimi, maker of Mi Power Bank, Mi Band maker Huami and Ninebot to name a few. RMB 10 billion, is the revenue that the company is expecting to get as revenue by the end of the year.
Speaking about his foray into the Indian market with the content streaming business he said, “delivering the right content is important on Mi TV and we are making lots of bets in demand content. Our partnership with Hungama is just an example. Moreover, platforms like YouTube are also extremely important for the on-demand content ecosystem and we want Mi TV to be a part of the transition.”
I also think that at present the strategies that the company has applied don’t indicate towards any Samsung-like strategy. However, I would definitely like to see what happens in the future.
What do you think? Is Hugo Barra’s explanation acceptable? Do let us know in the comments section.
