Xiaomi
Xiaomi Corporation (/ˈʃaʊmi/;[2] Chinese: 小米), commonly known as Xiaomi and registered as Xiaomi Inc., is a Chinese designer and manufacturer of consumer electronics and related software, home appliances, automobiles and household hardware. It is the second-largest manufacturer of smartphones in the world, behind Samsung,[3] most of which run on the MIUI (now HyperOS) operating system, which is based on the Android operating system. The company is ranked 338th and is the youngest company on the Fortune Global 500.[4][5]
Xiaomi
小米集团
Xiǎomǐ
- SEHK: 1810
- Hang Seng Index component
6 April 2010
Worldwide
CN¥280.04 billion US$40.7 billion
(2022)[1]
CN¥2.81 billion US$0.408 billion (2022)[1]
CN¥2.5 billion US$0.36 billion (2022)[1]
CN¥273.51 billion US$39.72 billion (2022)[1]
CN¥143.92 billion US$20.9 billion (2022)[1]
32,543 (31 December 2022)[1]
- Xiaomi Auto
- ZMI
- Black Shark
- Zhigu Corporation
xiǎomǐ
xiǎomǐ
Xiaomi was founded in 2010 in Beijing by Lei Jun along with six associates. Lei had founded Kingsoft as well as Joyo.com, the latter of which he sold to Amazon for $75 million in 2004. In August 2011, Xiaomi released its first smartphone and, by 2014, it had the largest market share of smartphones sold in China. Initially the company only sold its products online; however, it later opened brick and mortar stores.[6] By 2015, it was developing a wide range of consumer electronics.[7] In 2020, the company sold 149.4 million smartphones and its MIUI (now HyperOS) mobile operating system has over 500 million monthly active users.[8] As of 2023, Xiaomi is the third-largest seller of smartphones worldwide, with a market share of about 12%, according to Counterpoint.[9] Its presence led some people to call Xiaomi the "Apple of China".[10] It has come up with its own range of wearable items.[11] It also is a major manufacturer of appliances including televisions, flashlights, unmanned aerial vehicles, and air purifiers using its Internet of things and Xiaomi Smart Home product ecosystems.
Xiaomi keeps its prices close to its manufacturing costs and bill of materials costs by keeping most of its products in the market for 18 months, longer than most smartphone companies.[12][13] The company also uses inventory optimization and flash sales to keep its inventory low.[14][6]
Innovation and development[edit]
In the 2021 review of WIPO's annual World Intellectual Property Indicators Xiaomi was ranked as 2nd in the world, with 216 designs in industrial design registrations being published under the Hague System during 2020.[101] This position is up on their previous 3rd-place ranking in 2019 for 111 industrial design registrations being published.[102]
On 8 February 2022, Lei released a statement on Weibo to announce plans for Xiaomi to enter the high-end smartphone market and surpass Apple as the top seller of premium smartphones in China in three years. To achieve that goal, Xiaomi will invest US$15.7 billion in R&D over the next five years, and the company will benchmark its products and user experience against Apple's product lines.[103] Lei described the new strategy as a "life-or-death battle for our development" in his Weibo post, after Xiaomi's market share in China contracted over consecutive quarters, from 17% to 14% between Q2 and Q3 2021, dipping further to 13.2% as of Q4 2021.[104][105][106]
According to a recent report by Canalys, Xiaomi leads Indian smartphone sales in Q1. Xiaomi is one of the leaders of the smartphone makers in India which maintains device affordability.[107]
In 2022, Xiaomi announced and debuted the company's humanoid robot prototype to the public, while the current state of the robot is very limited in its abilities, the announcement was made to mark the companies ambitions to integrate AI into its product designs as well as develop their humanoid robot project into the future.[108]
Electric vehicles[edit]
In 2021, Xiaomi announced a 10 billion USD investment into electric vehicles.[109][110] In late 2023 Xiaomi unveiled its first production vehicle, the Xiaomi SU7, and publicly announced a goal to become one of the five largest automakers in the world.[111][112] On 28 March 2024, Xiaomi officially launched the SU7 sedan in Beijing.[113]
Corporate identity[edit]
Name etymology[edit]
Xiaomi (小米) is the Chinese word for "millet".[119] In 2011 its CEO Lei Jun suggested there are more meanings than just the "millet and rice".[120] He linked the "Xiao" (小) part to the Buddhist concept that "a single grain of rice of a Buddhist is as great as a mountain",[121] suggesting that Xiaomi wants to work from the little things, instead of starting by striving for perfection,[120] while "mi" (米) is an acronym for Mobile Internet and also "mission impossible", referring to the obstacles encountered in starting the company.[120][122] He also stated that he thinks the name is cute.[120] In 2012 Lei Jun said that the name is about revolution and being able to bring innovation into a new area.[123] Xiaomi's new "Rifle" processor[124] has given weight to several sources linking the latter meaning to the Chinese Communist Party's "millet and rifle" (小米加步枪) revolutionary idiom[125][126] during the Second Sino-Japanese War.[127][128][129][130]
Reception[edit]
Imitation of Apple Inc.[edit]
Xiaomi has been accused of imitating Apple Inc.[134][135] The hunger marketing strategy of Xiaomi was described as riding on the back of the "cult of Apple".[15]
After reading a book about Steve Jobs in college, Xiaomi's chairman and CEO, Lei Jun, carefully cultivated a Steve Jobs image, including jeans, dark shirts, and Jobs' announcement style at Xiaomi's earlier product announcements.[136][137][138][139] He was characterized as a "counterfeit Jobs."[140][141]
In 2013, critics debated how many of Xiaomi's products were innovative,[139][20][142] and how much of their innovation was just really good public relations.[142]
Others point out that while there are similarities to Apple, the ability to customize the software based upon user preferences through the use of Google's Android operating system sets Xiaomi apart.[143] Xiaomi has also developed a much wider range of consumer products than Apple.[104]
Violation of GNU General Public License[edit]
In January 2018, Xiaomi was criticized for its non-compliance with the terms of the GNU General Public License. The Android project's Linux kernel is licensed under the copyleft terms of the GPL, which requires Xiaomi to distribute the complete source code of the Android kernel and device trees for every Android device it distributes. By refusing to do so, or by unreasonably delaying these releases, Xiaomi is operating in violation of intellectual property law in China, as a WIPO state.[144] Prominent Android developer Francisco Franco publicly criticized Xiaomi's behaviour after repeated delays in the release of kernel source code.[145] Xiaomi in 2013 said that it would release the kernel code.[146] The kernel source code was available on the GitHub website in 2020.[147]
Privacy concerns and data collection[edit]
As a company based in China, Xiaomi is obligated to share data with the Chinese government under the China Internet Security Law and National Intelligence Law.[148][149] There were reports that Xiaomi's Cloud messaging service sends some private data, including call logs and contact information, to Xiaomi servers.[150][151] Xiaomi later released an MIUI update that made cloud messaging optional and that no private data was sent to Xiaomi servers if the cloud messaging service was turned off.[152]
On 23 October 2014, Xiaomi announced that it was setting up servers outside of China for international users, citing improved services and compliance to regulations in several countries.[153]
On 19 October 2014, the Indian Air Force issued a warning against Xiaomi phones, stating that they were a national threat as they sent user data to an agency of the Chinese government.[154]
In April 2019, researchers at Check Point found a security breach in Xiaomi phone apps.[155][156] The security flaw was reported to be preinstalled.[157]
On 30 April 2020, Forbes reported that Xiaomi extensively tracks use of its browsers, including private browser activity, phone metadata and device navigation, and more alarmingly, without secure encryption or data anonymization, more invasively and to a greater extent than mainstream browsers. Xiaomi disputed the claims, while confirming that it did extensively collect browsing data, and saying that the data was not linked to any individuals and that users had consented to being tracked.[158] Xiaomi posted a response stating that the collection of aggregated usage statistics data is used for internal analysis, and would not link any personally identifiable information to any of this data.[159] However, after a follow-up by Gabriel Cirlig, the writer of the report, Xiaomi added an option to completely stop the information leak when using its browser in incognito mode.[160]
Censorship[edit]
In September 2021, amidst a political spat between China and Lithuania, the Lithuanian Ministry of National Defence urged people to dispose the Chinese-made mobile phones and avoid buying new ones,[161] after the National Cyber Security Centre of Lithuania claimed that Xiaomi devices have built-in censorship capabilities that can be turned on remotely.[162]
Xiaomi denied the accusations, saying that it "does not censor communications to or from its users", and that they would be engaging a third-party to assess the allegations. They also stated that regarding data privacy, it was compliant with two frameworks for following Europe's General Data Protection Regulation (GDPR), namely its ISO/IEC 27001 Information Security Management Standards and the ISO/IEC 27701 Privacy Information Management System.[163]
Legal actions[edit]
State administration of radio, film and television issue[edit]
In November 2012, Xiaomi's smart set-top box stopped working one week after the launch due to the company having run foul of China's National Radio and Television Administration.[164][165][166] The regulatory issues were overcome in January 2013.[167]
Misleading sales figures[edit]
The Taiwanese Fair Trade Commission investigated the flash sales and found that Xiaomi had sold fewer smartphones than advertised.[168] Xiaomi claimed that the number of smartphones sold was 10,000 units each for the first two flash sales, and 8,000 units for the third one. However, FTC investigated the claims and found that Xiaomi sold 9,339 devices in the first flash sale, 9,492 units in the second one, and 7,389 for the third.[169] It was found that during the first flash sale, Xiaomi had given 1,750 priority ‘F-codes’ to people who could place their orders without having to go through the flash sale, thus diminishing the stock that was publicly available. The FTC fined Xiaomi NT$600,000.[170]
Shut down of Australia store[edit]
In March 2014, Xiaomi Store Australia (an unrelated business) began selling Xiaomi mobile phones online in Australia through its website, XiaomiStore.com.au.[171] However, Xiaomi soon requested that the store be shut down by 25 July 2014.[171] On 7 August 2014, shortly after sales were halted, the website was taken down.[171] An industry commentator described the action by Xiaomi to get the Australian website closed down as unprecedented, saying, "I’ve never come across this [before]. It would have to be a strategic move."[171] At the time this left only one online vendor selling Xiaomi mobile phones into Australia, namely Yatango (formerly MobiCity), which was based in Hong Kong.[171] This business closed in late 2015.[172]
Temporary ban in India due to patent infringement[edit]
On 9 December 2014, the Delhi High Court granted an ex parte injunction that banned the import and sale of Xiaomi products in India. The injunction was issued in response to a complaint filed by Ericsson in connection with the infringement of its patent licensed under reasonable and non-discriminatory licensing.[173] The injunction was applicable until 5 February 2015, the date on which the High Court was scheduled to summon both parties for a formal hearing of the case. On 16 December, the High Court granted permission to Xiaomi to sell its devices running on a Qualcomm-based processor until 8 January 2015.[174] Xiaomi then held various sales on Flipkart, including one on 30 December 2014. Its flagship Xiaomi Redmi Note 4G phone sold out in six seconds.[175] A judge extended the division bench's interim order, allowing Xiaomi to continue the sale of Qualcomm chipset-based handsets until March 2018.[176]
US sanctions due to ties with People's Liberation Army[edit]
In January 2021, towards the end of the presidency of Donald Trump, the United States government named Xiaomi as a company "owned or controlled" by the People's Liberation Army and thereby prohibited any American company or individual from investing in it.[177] However, the investment ban was blocked by a US court ruling after Xiaomi filed a lawsuit in the United States District Court for the District of Columbia, with the court expressing skepticism regarding the government's national security concerns.[178] Xiaomi denied the allegations of military ties and stated that its products and services were of civilian and commercial use.[179] In May 2021, Xiaomi reached an agreement with the Defense Department to remove the designation of the company as military-linked.[180]
Lawsuit by KPN alleging patent infringement[edit]
On 19 January 2021, KPN, a Dutch landline and mobile telecommunications company, sued Xiaomi and others for patent infringement. KPN filed similar lawsuits against Samsung in 2014 and 2015 in a court in the US.[181]
Lawsuit by Wyze alleging invalid patent[edit]
In July 2021, Xiaomi submitted a report to Amazon alleging that Wyze Labs had infringed upon its 2019 "Autonomous Cleaning Device and Wind Path Structure of Same" robot vacuum patent. On 15 July 2021, Wyze filed a lawsuit against Xiaomi in the US District Court for the Western District of Washington, arguing that prior art exists and asking the court for a declaratory judgment that Xiaomi's 2019 robot vacuum patent is invalid.[182]
Sanctions[edit]
Sponsoring the Russian invasion of Ukraine[edit]
After the beginning of Russian invasion of Ukraine Xiaomi reported the suspension of operations in Russia, but in July 2022, Xiaomi and its sub-brand POCO together held 42% of the Russian smartphone market, ranking first in terms of sales.[187] On 13 April 2023 Xiaomi Corporation and 13 Xiaomi officials (responsible key management), namely Lei Jun, Lin Bin, Lu Weibing, Liu De, Zhang Feng, Zeng Xuezhong, Yan Kesheng, Lam Sai Wai Alain, Zhu Dan, Wang Xiaoyan, Qu Heng, Ma Ji and Yu Man, were listed by Ukraine's National Agency on Corruption Prevention (NACP) on their list of "international sponsors of war"[188] because the company continued its operations in Russia after Russia's invasion and remained a leader in smartphone sales there.[188][189][190]
Finland's Reaction to Xiaomi's Russia Operations[edit]
Chinese smartphone brands continued to gain market share in Russia filling the gap left by Western brands, that withdrew following Russia’s invasion of Ukraine, according to a local retailer.[191]
On 21 September 2023, Telia, DNA, and Elisa, Finland’s major mobile carriers, have halted the sale of Xiaomi Technology products due to the company's ongoing business activities in Russia.[192] This decision reflects the company's commitment to maintaining its operations in Russia despite the Ukraine invasion. Finnish carriers' move comes after Xiaomi faced several challenges in its European business in 2023. In March and April, Poland and Lithuania prohibited the sale of its products, while the European Union imposed sanctions[193] on Xiaomi's CEO, Lei Jun.
The sanctions imposed on Xiaomi are a component of the EU's broader strategy aimed at urging Russia to withdraw from Ukraine. In addition to this, the EU has implemented a ban on exporting various goods to Russia, including semiconductors crucial for smartphone manufacturing. Xiaomi's ongoing operations in Russia have sparked debate. While the company asserts its obligation to serve Russian customers and support its employees, some contend that it indirectly supports the Russian government financially.[194]
Overseas manufacturing[edit]
Inaugural plant in Pakistan[edit]
Xiaomi's mobile device manufacturing plant was inaugurated on 4 March 2022, to begin production in Pakistan. The plant was set up in conjunction with Select Technologies (Pvt) Limited, an Air Link fully owned subsidiary. The production plant is located in Lahore.[195]
As of July 2022, the future of the plant is uncertain due to the 2021–2023 global supply chain crisis.[196]
