Edition Reuters shared the interesting revelations of the Vice-President Xiaomi Hugo Barra. The recent recognition of the ambitious smartphone maker LeEco, shortage of Finance has led some experts to suggest that Xiaomi will soon face a similar problem, especially looking at the negative dynamics of sales of the latest smartphones of the brand.
Vice President of Xiaomi said that the company had not earn “a penny” on the issue of smartphones and I’m sure would make up for success in other areas. First and foremost, it relies on the segment of “smart” household devices as well as on revenue generated by applications.
In 2014, in a period of rapid growth of the smartphone market Xiaomi was the most successful among the young Chinese companies, failing to reach a market value of $46 billion. However, Barra said that the company had never relied in a business model solely on smartphones.
Therefore, the approach Xiaomi closer to Amazon than to Apple, with which is often compared to a Chinese manufacturer. The company sells their devices at a minimal price needed to recoup their development, production and delivery. The only attempt of Amazon to start selling the phone failed miserably, and the device Xiaomi has attracted much attention.
At the moment, Apple remains almost the only company that makes iPhones. In the third quarter of 2016, the Corporation has generated 104% of the operating profit of the industry (the figure is more than 100% as its competitors lost money). Though Samsung sold 20% of all smartphones on the market, received only 0.9% of the total operating profit.
As expressed by a top Manager, Xiaomi can release 10 billion phones, but it did not work. The company, in fact, gives them to customers at a price close to cost. The Vice President noted that Xiaomi now needs no public offering of shares or to borrow working capital. All concerns about its shaky financial situation are unfounded.
In January at CES 2017 in Las Vegas, Xiaomi promises to present a new product.
