China’s Xiaomi Rises to Become No. 3 Smartphone Maker

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Xiaomi Corp.
Visitors use mobile phones in front of a reception desk at the Xiaomi Corp. headquarters in Beijing, China. Photographer: Brent Lewin/Bloomberg

Xiaomi Corp. became the world’s third-largest smartphone vendor after outselling rivals in its home market of China with inexpensive devices packed with high-end features.

Xiaomi had 5.6 percent of the global market in the three months ended September, the first time it cracked the world’s top three, Strategy Analytics said in an e-mailed statement today. Suwon, South Korea-based Samsung Electronics Co. remained the largest, followed by Apple Inc.

Founder Lei Jun is expanding the Beijing-based company internationally by starting sales in India and Singapore as he targets 10 new markets. Xiaomi, which makes devices using a customized version of Google Inc.’s Android operating system, keeps costs down by selling directly to consumers online and has set a goal of boosting sales fivefold to 100 million phones next year.

“Xiaomi was the star performer in the quarter,” said Neil Mawston, executive director of Strategy Analytics. “Xiaomi’s Android smartphone models are wildly popular in the Chinese market. Xiaomi’s next step is to target the international market.”

Samsung Falling

Samsung’s share of the global market fell to 24.7 percent from 35 percent a year earlier. Cupertino, California-based Apple dropped to 12.3 percent from 13.4 percent, Strategy Analytics said. Samsung today reported its smallest quarterly earnings in more than two years.

The global top five was rounded out by Seoul-based LG Electronics Inc., with 5.2 percent, and Shenzhen, China-based Huawei Technologies Co. with 5.1 percent, Strategy Analytics said.

The tight competition in smartphones was reflected by a second set of rankings released today by International Data Corp. that produced a different set of results.

The IDC data shows Samsung leading with 23.8 percent, followed by Apple with 12 percent; Xiaomi with 5.3 percent; Beijing-based Lenovo Group Ltd. with 5.2 percent and LG with 5.1 percent.

With such intense competition, profiting from smartphone growth becomes the issue for almost all vendors, said Ryan Reith, program director with IDC’s Worldwide Quarterly Mobile Phone Tracker.

“The challenge has now become how to make money on devices that are quickly becoming commodity products,” Reith said. “Outside of Apple, many are struggling to do this.”

Xiaomi sells its flagship Mi 4 smartphone starting from 1,999 yuan on its China website, or just more than one-third the starting price of 5,288 yuan for Apple’s iPhone 6 in China.

Founded in 2010 as a company to make software for mobile devices running Google’s Android system, Xiaomi introduced its first smartphone only in 2011. The company in April said this year it would add markets including India, Brazil, Russia, Malaysia, Indonesia, Thailand, Vietnam, Turkey, Mexico and the Philippines.

— With assistance by Edmond Lococo

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