I’m not a fan of Xiaomi but, at one level, it’s been interesting to witness the system of activities the company has assembled to help it compete. (Though with minimal profit, I would add.) And I’m always curious to hear how different leaders speak about competing.
With that in mind, here are some notable excerpts from Li Yuan’s Q&A with Xiaomi CEO Lei Jun, in The Wall Street Journal:
We’ll need to try our best to be successful in a few emerging markets in a big way. […] Our business model isn’t about how many phones we sell. We can’t monetize unless we become a highly influential player in a country or a region. […] we want to sell to 10% to 20% of the population in India and other big countries. Then we’ll have the influence of a huge media organization and the opportunity to monetize in various ways. […]
China’s smartphone industry is in elimination games now. […] It’s unbelievable that there are still a few dozen phone companies in China now. […]
In the past you made a phone, hoping to sell it to billions of users in the world. Now you can’t think in this way. You’ll have to design different phones for different crowds in different scenarios. […]
Almost all our users are young, so we might have influence on 20% to 25% of the young population. They watch TV, listen to music and read books and news. Xiaomi provides all of these. Doesn’t this make Xiaomi a huge content channel? Each day, our users use their phone 115 times and spend four and half hours on their phones. Just imagine what a powerful broadcast platform I have!
It’s thought-provoking to hear Lei Jun speak about Xiaomi’s business model. Note, however, that we hear about Xiaomi’s success in smartphones, but we don’t really hear about any sort of success in content – in terms of Xiaomi innovation or Xiaomi profitability – even though Lei Jun cites content as the ultimate aim of the business model.
By the way, I highlighted his views on “different phones for different crowds” because, as the smartphone market reaches maturity, we are seeing, and will continue to see, attempts to create job-specific or user-specific devices. Apple, as a maker of general-computing devices, has always created smartphones that are asymmetrical to this, because apps and solid all-around hardware allow for a multitude of specialized uses. But other companies, being relatively stronger in hardware than they are in software, find (hope) that this sort of micro-segmentation is a degree of freedom they can exploit.