Is Xiaomi ready for the global market?

Escrito el 30 agosto 2013 por Ricardo Pérez Garrido en Asia, Dispositivos / Devices, Innovación / Innovation, Software

The news that one of the top executives at Google’s Android initiative is moving to Xiaomi where all over the place yesterday. There are a few interesting issues here. Let me talk about some of them, related to the role of Xiaomi, the evolution of the Android ecosystem, and the possible fit of the Chinese manufacturers in a global, complex market.

Xiaomi is basically a Chinese company. They offer the level of functionality of a high end smartphone at a fraction of the price of higher-end products. They are very smart in how they manage the personalization of Android, and also in how the control the number of different models vs. their marketing efforts. Though their market share is still low, their growth is amazing and the approach to how they add value is different to the traditional players. Though many think about the US market as the next step for the company after Mr. Barra joins the company, it makes more sense to think about other emerging markets where customers desperately want options for high end capabilities in a cheap smartphone. Xiaomi, with its products and marketing approach, can be a great candidate  for this expansion.

The Android ecosystem can become an issue for Google if they loose control of the advertising market and the basic applications. With Xiaomi heavily modifying the system, there is a strong risk of losing control. If Google then moves to close more and more the OS or give priority access to Motorola (or Samsung in this case), it will be a good indicator for the rest of the players to find a replacement. Samsung is already doing that. Xiaomi might be for now a great ally of Google. But it might also risk the great multisided network business model that they have created for many companies. With more players gaining relevance, the decisions related to how much control to exert over Android are going to be key in the future of Google in the mobile space.

Finally there is the role of Chinese manufacturers in a global market, which can change the dynamics of the evolution of emerging markets in Asia and Africa. Another competitor will be the Firefox alternative that some Telcos are promoting as an alternative to Android. The fact that most of these manufacturers use Android is a great opportunity to improve the ecosystem of solutions to customers with quite different needs than the ones Apple or Samsung are covering. Great opportunity again for complementary products and business models. From payment systems, to specialized coupons, to… (if you have a brilliand idea please call me…)


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