Comment on The Rise of a New Smartphone Giant: China's Xiaomi

Over the summer, Chinese company Xiaomi took the No. 1 position in China’s competitive market and became the world’s third-largest phone-maker in the process. [...] a clever social media strategy and a business plan that emphasized selling services that work on the phone helped Xiaomi build frenzied support from young and trendy Chinese. With people in China expected to buy 500 million smartphones in 2015 — more than three times as many as will be sold in the United States, according to researcher IDC — Xiaomi is poised to cement its place as one of the most powerful phone-makers in the world’s most important market. [...] the company’s founders, who include Chinese entrepreneur Lei Jun and former Google executive Lin Bin, hope that status will help them take their brand globally. Striking similarities between Xiaomi’s well-attended product unveiling ceremonies and Apple’s tightly choreographed media events have meant that Xiaomi is often described as the Apple of China — largely successful because, some experts say, it produces cheap knockoffs of Apple’s and Samsung’s high-end phones. Li Nan, vice president of the rival Meizu, which began in the early 2000s by making digital music players and aims at customers slightly older and wealthier than Xiaomi’s, likens the devotion of Xiaomi supporters to a religion. Though Xiaomi makes some money on phone sales, the company’s plan is to increase profitability by selling services such as entertainment and apps through the phone. The company has also started to sell other devices, such as a smart television, a tablet and a fitness band, that work on its finely tuned user interface, which it built atop Google’s Android operating system. Holding their bodies rigid in a push-up position, the executives looked markedly different from traditional Chinese executives, who are rarely seen outside formal conferences. The last point is important because if large service providers give consumers significant handset subsidies, the edge Xiaomi gains by selling cheap phones evaporates.