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Will Xiaomi become a new Huawei?

The latest statistics show Huawei’s tough slippage in most of its key smartphone markets. Sanctions targeting Huawei’s supply chain have even forced it to sell its sub-brand, Honor, in order to have a chance to source its components.

Meanwhile, the void left by Huawei is opening the door for other brands to take over and it seems that Xiaomi is the most active in this race.

A successor to Huawei’s throne?

The back of the Xiaomi Mi 10 Pro

Xiaomi’s Q3 2020 financial report shows that its smartphone shipments jumped 45% year-on-year. Previously, the Counterpoint Research report also showed that Huawei’s shipments decreased significantly by 24% compared to this quarter last year. Huawei’s market share also dropped to 14%.

In other words, Xiaomi has now surpassed Huawei in terms of global market share and is currently the most popular Chinese smartphone brand. Xiaomi’s 45% growth is even more impressive as the remaining brands in the top 5 (excluding Samsung) all dropped their shipments compared to the same period last year. Even Samsung, although growing, is only 2% speed.

Over the past few years, Xiaomi’s strategy has always focused on Huawei’s key markets around the world, including Europe, the Middle East and Africa, while maintaining its growth potential in its home market of China. and India. As early as Q2 2020, Xiaomi has surpassed Huawei in terms of market share in Europe.

Maybe this growth comes at a time when Huawei struggled with sanctions from the US government, but this is no coincidence.

Will Xiaomi become a new Huawei | Technology iced tea

Xiaomi grew 46% in Q3, while Huawei, Apple and Oppo all dropped their shipments.

Xiaomi has long avoided putting all eggs in one basket, and this approach is showing its fruit. Xiaomi said that it is the first time that the revenue from overseas markets now accounts for more than half of the company’s total revenue (55%). This means that the brand can rely on the foreign or domestic market if the context is right. This strategy has had a big effect on Huawei in the past, and now Xiaomi is learning to do this as well.

Xiaomi also adopts a strategy of cooperation with carriers. Most carriers are looking to fill the void left by Huawei’s non-Google phones, and Xiaomi is quickly taking advantage of it. The company said it has partnered with 50 carriers with “more than 100 networks” in 50 countries. Huawei phone labels are ready to be replaced with Xiaomi devices.

The high end segment puzzle conundrum

Xiaomi’s budget phones have been the main drivers of growth for the company over the years. Three of the top 10 best-selling phones globally in Q3 of 2020 were Xiaomi’s low-cost models. They are also the devices in the top 10 best-selling phones in Q1 this year.

However, Xiaomi’s main challenge is in the high-end segment, where Huawei used to compete on par with Samsung and iPhone. For a long time, Xiaomi has sought to enter this segment. However, high-end devices like the company’s Mi 8 or Mi 9 series are considered mid-range.

Will Xiaomi become a new Huawei | Technology iced tea

But last year Mr. Lei Jun showed that this will change when talking about the Mi 9: “I told insiders that this might be the last time we sell phones for less than 3,000 yuan (about $ 447). In the future, our phones will be more expensive – not by much, but a bit more expensive. ”

Indeed Xiaomi’s Mi 10 series was more expensive at launch – but not “a bit” as Lei Jun said. The Mi 10 and Mi 10 Pro are priced at 3,999 Yuan (about $ 573) and 4,999 Yuan (about $ 716) respectively in China. When sold in Europe, their prices climbed to 952 USD and 1,191 USD respectively.

Even if Xiaomi also launches a lower-priced flagship, the Mi 10T, they will need to add more features, such as water resistance, even more new tech screens if they want to sell a device. Equivalent to the top flagships of Huawei or Samsung.

Even at lower prices, Xiaomi’s new devices have to contend with rivals from Samsung and Apple in this segment. While having comparable prices, devices like the Samsung Galaxy S20 FE and iPhone 12 / iPhone 12 Mini are both branded devices more familiar to users in this segment. Therefore, if you cannot find another more attractive approach, it will be difficult for Xiaomi to compete with Samsung and Apple in this segment.

Will Xiaomi become a new Huawei | Technology iced tea

For the first time Xiaomi is present in the high-end segment, although its market share is only 2%, behind Apple, Samsung, Huawei and OPPO.

However, market research reports have also shown some encouraging results. According to Counterpoint, in Q1 2020, Xiaomi was in the top 5 brands in the high-end smartphone segment (over $ 400). From Q3 2018 until now, this is the first time Xiaomi has achieved this achievement with the great contribution from the Mi Note 10 series and the Mi 10 series.

However, Xiaomi’s market share in this segment is only 2%. But with Huawei’s market share in this segment accounting for 12% and likely a sharp decline in the future, Xiaomi’s market share is likely to increase dramatically in the future.

What future is for Xiaomi in the year 2021

The year 2020 brings many advantages for Xiaomi to rise in the world market: the Covid-19 pandemic along with tougher sanctions policies on Huawei. But will this continue into 2021? Will Xiaomi be able to secure second place in the rankings in 2021?

Will Xiaomi become a new Huawei | Technology iced tea

Mr. Biden’s victory may help Huawei ease the burden from the sanctions. The return to Google services will be a big win for Huawei – if any – but it still takes time to regain users’ trust.

Besides competition from giants like Samsung, Huawei or Apple, Xiaomi will also face challenges from brands like Oppo, Realme and Vivo next year. In fact, for the European market, all three brands are still relatively new, even though Realme is making it difficult for Xiaomi’s global market share as well as in India with its low-cost devices.

For many years now, Xiaomi has invested in R&D when the company recently said that it has invested about $ 1.14 billion in 2019 in this activity, an increase of 29.7% compared to 2018. The company is expected to spend about $ 1.5 billion on this activity in 2020. However, these figures are too small compared to Huawei’s $ 15 billion R&D spending in 2019.

Even so, Xiaomi is expected to launch fast charging, under-display camera and wireless charging technology in 2021. But will these technologies help them secure the No. 2 spot in 2021, just? It will take time for an answer.

Refer to Android Authority

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