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Move over, Apple, Chinese smartphones are here

By Gao Yuan | China Daily | Updated: 2015-01-16 07:11

It's lighter and thinner, has a bigger screen and sells at a fraction of the price of an iPhone 6 Plus.

Affordable-smartphone maker Xiaomi Corp introduced a strong challenge to Apple Inc on Thursday, along with an ambitious plan for the smart home sector.

Selling at 2,299 yuan ($370) for the entry-level product, the Mi Note, with its 5.7-inch screen, is the company's first large-screen device. The iPhone 6 Plus, which is equipped with a 5.5-inch screen, sells for more than 6,000 yuan in China.

Lei Jun, chief executive of Xiaomi, said the Chinese company will introduce more products using top-tier technologies and featuring low prices.

"We value innovation. Xiaomi will have tens of thousands of patents 10 years from now," Lei said.

Xiaomi is now the third-largest vendor of smartphones worldwide, lagging behind Apple and Samsung Electronics but edging out local brands such as Lenovo and Huawei, according to IDC, a research firm.

Analysts said Xiaomi's aggression has cost Apple and Samsung a big chunk of market share on the Chinese mainland. Xiaomi is now the largest smartphone maker in the country, according to consultancy Analysys International.

Xiaomi sold 61.12 million smartphones in 2014, an increase of 227 percent from the year before. The majority of its sales were in China.

Apple is attempting to enlarge its presence in second-tier cities to prop up its market share. The company, based in the United States, is opening five new brick-and-mortar retail stores in China before March, according to a Xinhua News Agency report.

Two weeks after Apple's Zhengzhou store opened for business, the company's 14th outlet on the Chinese mainland is set to open in Zhejiang province. Apple CEO Tim Cook said in October that the company will have 40 stores in China by 2016.

Because Apple only targets mid-and high-end buyers, the company's market share in China dropped to a single digit last year, Analysys International said.

Gene Cao, a senior analyst at Forrester Research Inc, said Xiaomi's victory over Apple in China was due to the Chinese company having a better business strategy than other players.

"Tech innovations will be surrounded by mobile Internet and smart homes this year," said Cao. Xiaomi is putting most of its energy into connecting household devices. "Smartphones are a key for Xiaomi to enter the smart home market," Lei, the CEO, said, adding that Xiaomi phones will be used to control wirelessly connected household appliances such as refrigerators, ovens and televisions.

The company will also launch a number of connectivity, control and cloud modules, using standards that can be pre-installed on traditional household appliances. The cost of the module is 22 yuan annually and will be lowered to 15 yuan later to expand installations, Lei said.

In late 2014, Xiaomi invested nearly 1.3 billion yuan in Midea Group, a Guangdong-based home appliance giant, to make smart home appliances that can be remotely controlled by smartphones.

Lei said he will create partnerships with more appliance makers this year.

gaoyuan@chinadaiy.com.cn

 

 Move over, Apple, Chinese smartphones are here

Staff members at the Apple Store in Zhengzhou, Henan province, welcome customers on Saturday. Zhang Tao / for China Daily

 

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