Has Xiaomi reached its limit?

Apr 19, 2016, 08:27 am

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Xiaomi struggles with slowing growth.

By Hong Soon-do, Beijing correspondent, AsiaToday - Not long ago, China's Xiaomi was referred to a startup that created a miracle in the world history of smartphones. However, its recent actions are disappointing and there are signs that its rocket ship is coming back to earth. Some even claim that the company has reached its fateful limit as a copycat.

Xiaomi's CEO Lei Jun and the executives. Some industry insiders say thecompany is showing signs of reaching maturity quickly./ Source from searchengine Baidu

Considering Beijing ICT industry insiders' comments on Monday, it seems Xiaomi's recent performance is the biggest reason for such prospect. The firm had created a miracle in 2014, a year when sales of its smartphones tripled to 61 million units. As a result, Xiaomi was called the next Apple. Based on its confidence, Xiaomi said it would sell 100 million phones in 2015. It believed that the goal was achievable enough.

But the results were devastating. It ended up selling 70 million. It wasn't simply the performance that was being reduced. The gap between the firm and its rival Huawei, who sold 108 million phones, widened so much. Adding the fact that it goes far beyond Samsung and Apple in terms of global market sale competitiveness, the firm is definitely facing tough questions about its growth.

It seems the situation would be tougher. Most of all, it seems tough for Xiaomi to compete with Huawei for the market leader position. Moreover, local rivals Vivo and Oppo are chasing after Xiaomi. The return of Samsung Electronics with cheap C-Series, instead of premium product, should impose a burden on the firm. In short, Xiaomi has the world against it now.

Nevertheless, there are very few things that it can do. Rather, it is more correct to say that it is surrounded by a bunch of unfavorable conditions. Most of all, its patent problem with companies like Qualcomm is not being resolved. If the current situation continues, it would have to discard its dream to become a leader in the global market. It doesn't either have any exceptional ability to develop its own components. Rather, it has disadvantage compared to Samsung, Apple, and Huawei. In this regard, renowned ICT critic Zhou Ying pointed out that Xiaomi's crisis is a clear reality, pointing out, "Xiaomi has grown up so quickly. It needs to suffer growing pains. It should gain strength again in the process."

Copyright by Asiatoday