Smartphone Brands Adapt to Xiaomi’s Strategy

A growing number of phone brands around the world are rushing to copy China’s Xiaomi. What they want to replicate is the secret behind the company’s success. The company sold 60 million phones per year within about four years.

It seems that Xiaomi is just copying Apple and selling them at much cheaper price. But that kind of assessment is way off the mark. Ben Thompson a writer who blogs as Stratechery in a recent article explains that “The key understanding Xiaomi is they’re not so much selling smartphones as they are selling a lifestyle.”

Xiaomi targets the young people. Its made up of never before blended elements, all of which helps engender a sense of ownership for the fans of the brands- a strong sense of community, social marketing, listening to and incorporating user feedback, an emphasis on adaptable software and surprisingly powerful phones at lower prices.

What Some Major Players Are Doing

Micromax, the Indian phone brand, has created a sub-brand named Yu. Micromax is not a startup and has been around for a while. However, the Indian phonemaker has learned a few tricks from Xiaomi and has gone for a fresh approach, aiming to implement lessons learned.

The first smartphone under the new brand, the Yu Yureka came out in the market in mid-January. The phone has a very different skin than the other android Micromax phones. The Yu Yureka has a cool CyanogenMod that Micromax hopes will give them against the other Xiaomi phones in the local market.

Other major brands are also going for different strategies. Major players have realized that it is necessary to take a different approach to make their own phones more appealing. For example, Lenovo will be launching its own sub-brannd, Shenqi, in April and will only be selling phones under the brand online. Lenovo’s CEO Yang Yuanqing has mentioned in a Bloomberg interview that going for a new model will be the best way to appeal to the younger generation. This will also help Lenovo avoid any conflicts with their existing channels.

Chinese smartphone company, Coolpad, is also refreshing its current image by releasing a cooler, slicker looking phone named the Ivvi.

Making smartphones with a lot of hardware power at a cheaper price has been Xiaomi’s strongest suit. However, Xiaomi has already turned into a powerhouse, has a large market share and will probably snatch away more market share. It’s difficult to say right now whether the strategy by major brands will be successful at this point.

Having a Community

Oppo is a Chinese smartphone company which has also created a sub-brand, OnePlus. In May 2014, OnePlus phones were rolled out in May 2014 and went for foreign markets immediately. This was unlike Xiaomi which was far more careful about which markets it grew into initially.

Oneplus is going one step further to emulate Xiaomi’s strategy. Xiaomi at the beginning had a huge forum and cultivated fans. OnePlus also has a huge forum of fans, which the company is cultivating so that fans care about the brand and have a certain style.

When OnePlus launched, founder Pete Lau talked about how a lot of the phones out there are just unsatisfactory, low performance but highly overpriced. Xiaomi and OnePlus have made it a specialty to give back a huge value on the money customers spend and might one-up more expensive brands like Samsung and Apple.

Major Changes Will Take A While

Although cheap smartphone brands are gaining traction, Samsung is still at the top of the smartphone league. Samsung still has wide margins over Micromax in India. It leads other brands in China, albeit on a thinner scale. But as cheap smartphone brands have proven, different strategies will be needed if it’s going to wrest away customers from the big guys in the industry. It will take a while, but Xiaomi’s strategy may forever change the smartphone industry and market

Mustafizur Rahman Khan