Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Xiaomi is the biggest mobile phone maker in China and the fifth biggest in the world, says Canalys.
In Q2, Xiaomi sold 15 million smartphones in China. Samsung sold 13.2 million. It now has 14% of the China market.
Xiaomi I has more than tripled its sales since last year by a clever strategy of keeping users involved.
It offers unique software, unavailable on other brands, it has its own version of Android called Miui which allows user-feedback to constantly improve it, and It releases a new version of its OS every Friday.
More to the point it adopts Learning Curve pricing – selling at cost and relying on falling component cost to generate profit.
Meanwhile it sells apps, games, services etc and runs festivals to whip up customer appreciation.
Xiaomi has a charismatic founder and CEO Lei Jun, known as the Steve Jobs of China.