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MWC 2016: Xiaomi

By Ian Fogg, Head of Mobile, IHS Technology 이나리 기자l승인2016.02.25 09:20:59

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IHS analysis:

The Mi5 is a class leading smartphone with innovative design elements and the very latest hardware technology, but Xiaomi needs to do more with its software ecosystem to significantly grow its business beyond its home market of China. Although, the Mi5's low prices will help shipment volumes everywhere Xiaomi launches the MI5.

Until Xiaomi tackles the fundamental international issues with its portfolio, its shipment growth will continue to be low. Xiaomi is trying to address this with two things: the number of patents it is now filing around the world and its partnership with Qualcomm on the Mi5.

To grow smartphone shipments, Xiaomi must change its ecosystem strategy for the global, non-China market. Great hardware design alone will not be sufficient for Xiaomi to be successful globally long term. At best, it can deliver a few one-off hits. Sustainable differentiation comes from software and hardware and ecosystem integration together.

In its heart, Xiaomi knows this. Xiaomi has more engineers working on its MIUI Android software than the company has working on hardware. Hugo Barra argued the active user base is the most important metric for an Internet company, like Xiaomi, not shipments. Xiaomi has 170 million active users for MIUI, more than the 73 million smartphones it shipped in 2015.

IHS agrees an active installed base is a critical measure for understanding the smartphone market. IHS sees increasing numbers of Xiaomi smartphones appearing in use around the world in many countries where Xiaomi smartphones are not officially on sale.

Smartphone makers competing with Xiaomi must incorporate new active installed base metrics into the core KPIs they use in their business, as Xiaomi and Apple do, in order to compete with these ecosystem-focused companies. Focusing on device shipments is not sufficient and is a rookie mistake from the PC market. In mobile, different ways of building strategy and monitoring performance need to be used. Those players who focus on shipments alone risk their smartphone business following the trajectory of the PC market.

Xiaomi missed its 2015 smartphone shipment target by 7 million, because it was too exposed to the China market where fast growing iPhone sales hurt the company. In 2015, Xiaomi shipments grew 10%, as a result, Xiaomi must finally confront how to increase its global sales from the 8.6m non-China smartphone shipments Xiaomi achieved in 2015.

But, Xiaomi's MIUI software and associated services is optimized for the Chinese market where the Google Play store is not routinely pre-installed on Android smartphones. Outside China, Xiaomi's services are installed alongside Google's services, creating the potential for consumer confusion, but importantly weakening the consumer benefit of Xiaomi's optimized software design.

IHS expects the Mi5 to continue to appear in countries around the world, as previous Xiaomi models have done, and as iPhone appeared inside China before it was officially on sale. Other smartphone makers must continue to look over their shoulder, even if Mi5's official availability remains limited to a handful of countries.

Notable features:

" Mi5 Pro, $354: Snapdragon 820 / 128 GB storage, 4GB Ram;

" Mi5: $262: 820, 3GB RAM, 32GB storage; as well as a 64Gb option SKU;

" 3000mAh battery in a flagship smartphone with Snapdragon 820 chipset, and yet just 129g weight, LPDDR RAM, up to 128GB storage, 5.15" FHD display;

" 16MP F2.0 camera, with 4 axis optical image stabilization, with phase detection autofocus;

" Major design win for Qualcomm, initial AnTuTu speed tests indicated Mi5 is faster than both the LG G5 (also 820) and the Samsung Galaxy S7;

" First launch for a Xiaomi flagship at a global industry event, indicated importance of international market to Xiaomi;

" Xiaomi has filed 3600 patents globally, of which 22 are on display technology;

" Initial availability 1 March in China, with little information on subsequent launched in India and other international markets.

이나리 기자  narilee@techworld.co.kr
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