Xiaomi was founded in 2010 to make software for mobile devices running Google Inc.’s Android system. The company introduced its first smartphone in China the following year and has since begun branching into other consumer electronics as well. According to IDC, Xiaomi is now the third largest smartphone maker in the world followed by Lenovo and LG at fourth and fifth place respectively.
Xiaomi recently announced in a Weibo post that it sold 61 million smartphones in 2014 ($12 billion in sales). This has given the company a ton of confidence.
Xiaomi’s shipment market share in China increased significantly from 6% in 3Q13 to 15% in 3Q14, according to IDC, and Xiaomi surpassed Lenovo and Samsung to become the no.1 smartphone brand in China in terms of shipment in 3Q14. It plans to sell 100 million phones within 2015.
The Apple of Asia
Xiaomi's growth and popularity have sparked comparisons to Apple. The company has also been accused of copying Apple's style -- an allegation Xiaomi has brushed aside by saying it strives for its products to be as high-quality as Apple's, but its Mi phones function very differently from the iPhone.
It has been investing heavily in other manufacturers with the aim of building an ecosystem of Internet-connected devices and appliances to extend its reach beyond smartphones.
It is the expectation that Xiaomi will be able to establish an ecosystem like that of Apple that includes hardware, software and services, an ecosystem that works not only over mobile phones but also other devices - Sandy Shen (analyst at Gartner Inc.)
Baidu joining hands with Xiaomi
Baidu is the default search engine of Xiaomi browser in MIUI, Xiaomi’s deeply customized Android OS.
Xiaomi and Baidu jointly announced in November that Xiaomi, together with Shunwei Capital (Xiaomi Chairman Jun Lei affiliated fund), invests 300 million dollars in iQiyi, Baidu's online video arm.
Xiaomi brands itself as an Internet company that eschews traditional marketing and sells hardware at low prices as a distribution channel for its real money maker - software and services.
We are a company that the technology industry has never seen before," said Xiaomi CEO Lei Jun in his Weibo post. "From now onwards, every step we take is writing a new chapter in the history of the industry."
Recently Xiaomi raised $1.1 billion in a round of funding that cements its status as one of the world's most valuable private technology companies at a valuation of $45 billion. Investors include private equity funds All-Stars Investment, DST Global, Hopu Investment Management, and Yunfeng Capital, as well as the Singapore sovereign wealth fund GIC. According to investor Yuri Milner Xiaomi Corp.’s valuation could more than double to $100 billion, spurred by its latest financing round.
So, Xiaomi isn't Apple yet - but it could be soon.
Jack Ma vs. Lei Jun
In September, Jack Ma was crowned China’s richest person after his company Alibaba set the record for the world’s biggest IPO. Ma’s net worth has fluctuated greatly since the IPO due to surges and dips in stock prices, but he is now estimated to be worth between US$23.3 billion and US$28.7 billion.
As Xiaomi founder Lei Jun owns a whopping 77.8 percent of his company, way more than Jack Ma owns of Alibaba at just 6.3 percent, many already deemed Lei Jun the richest man in Asia.
Recent valuations put Lei Jun’s share of Xiaomi at US$31 billion to US$38.9 billion, well above Ma, and somewhere in the range of Facebook founder Mark Zuckerberg.
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Main interests of Furda are macroeconomic developments and trends.