Xiaomi Unveils ‘Mi Pad’ as Apple-Samsung Challenge Rises

Xiaomi Corp., the smartphone maker valued at $10 billion, will release a tablet computer in China next month as the company escalates its competition with Apple Inc. (AAPL) and Samsung Electronics Co. (005930)

The Mi Pad will have a 7.9-inch screen -- same as the iPad mini -- and use a Nvidia Corp. processor, Lei Jun, founder and chief executive officer, said at a press conference in Beijing today. The tablet will use Google Inc.’s Android software, start at 1,499 yuan ($240) and be made by Foxconn Technology Group.

“It’s very hard to do tablets well, and the market is going to be very hard,” Lei said. “We believe the Xiaomi tablet will be the best Android tablet out there.”

The four-year-old company is broadening its lineup of smartphones, televisions and routers while expanding to Hong Kong, Taiwan and Singapore. Xiaomi will enter 10 new markets, including India and Latin America, to meet its goal of tripling shipments to 60 million phones this year.

Xiaomi has no timeframe for introducing products in the U.S., though that is the company’s goal, Hugo Barra, head of international operations, said in an interview.

International Expansion

The Mi Pad tablet with 16 gigabytes of storage compares with an iPad mini selling for $399 online and a Samsung Galaxy Note 8.0 LTE selling for $329 on Amazon.com.

Xiaomi has lined up 100 applications and 400 games for its tablet, with plans to offer 1,000 of each by year’s end, Lei said. The Beijing-based company will roll out the tablet in “small quantities” in China first, and then expand sales to Southeast Asia, India and Latin America later this year, Barra said in an interview.

“We spent four years working up to the point where we thought we had the right hardware design and software capability to build a world-class tablet,” Barra said. “We think we are there, finally.”

Xiaomi also will sell a 49-inch, high definition television starting this month for 3,999 yuan.

The company keeps costs down by selling devices directly to consumers online. Xiaomi recorded 1.5 billion yuan ($241 million) in orders during a one-day Web sale in China on April 8 and is now the nation’s third-largest e-commerce site, the company said last month.

Price Cuts

Xiaomi cut the price of its flagship Mi3 smartphone last month to 1,699 yuan from 1,999 yuan. The new price is less than half the 4,488 yuan cost of Apple’s iPhone 5c. The Mi3 has a larger and sharper screen than the 5c, a camera with higher-density pixels, and speedy quadcore processors from Nvidia or Qualcomm Inc.

The combination of high-quality hardware and low prices propelled Xiaomi to become the world’s sixth-largest smartphone vendor during the first quarter, even as 97 percent of its sales were in China, according to data released by market researcher Canalys this month. It outsells Apple in China.

“The US is obviously not in our plans for this year,” Barra said. “It’s an insanely competitive market and getting there requires working hard to be ready. We will work up to that.”

Founded in 2010 as a company to make software for mobile devices running Google Inc. (GOOG)’s Android system, Xiaomi introduced its first smartphone in 2011. The company subsequently added the MiBox, a TV set-top box, and announced a TV that connects to the Web, running the Android operating system.

Xiaomi’s valuation hit $10 billion with a fundraising round in August.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Terje Langeland

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