Chinese upstart and smartphone manufacturer Xiaomi recently revealed the secret behind its surprisingly massive success — with more than 60 million units sold for 2014 alone — that has allowed it to become the world’s third top-selling phone maker, beating out more established brands Apple and Samsung in China.

No, it’s not actually the plush rabbit dolls that drive Xiaomi’s sales and revenue figures. Contrary to Kung Fu Panda’s “Secret Ingredient Noodle Soup” (“There is no secret ingredient!”) and to conspiracy theories, Xiaomi’s VP for International, Hugo Barra, has revealed in a recent interview that the company’s recipe for sales success is quite simple: A small portfolio, combined with longer average selling time per device, that allows the smartphone maker to make significant price concessions.

On average, Barra says, a Xiaomi phone stays on the shelf between 18 to 24 months, allowing it to undergo three to four rounds of price cuts. In addition to this, the company continues to sell older devices—as well as their tweaked versions—at reduced prices even after it has launched newer models. The longer shelf-life allows Xiaomi to secure superbly better component deals with its suppliers, where component costs decrease considerably over time and provide bigger margins on returns, allowing for price reductions.

For comparison, the company’s flagship Mi smartphone sells at around USD$300, while the higher-end iPhones and the similarly-priced Samsung Galaxy and Note devices sell beyond the USD$1000 range. Apple can only drool with envy, however, as Xiaomi continues to dominate the Chinese market despite the boost from its highly-touted iPhone 6, according to consumer trendspotter Kantar Worldpanel. In fact, Apple and Samsung have more reason for concern, as Xiaomi has started to test the waters in other Asian markets, with forecast sales of 100 million devices for this year. With its unique pricing model and a planned modular phone reportedly in the pipeline, these two companies would probably do well to look behind their backs as Xiaomi looks set to conquer the world soon.

VIA: Tech Crunch

  • tiger

    Wait, isn’t the brand that lied about their profits last year? Isn’t this the brand that all analysts stated that its business plan is UNSUSTAINABLE because it literally makes no profit on sales?

    This is like T-mobile…sure, discounts are great…but is it sustainable? No.

    Android ignorants love to yell marketshare…and how Apple will die anytime now…but fail to see that no one in Android land is making a profit…or at the very least sustain profits. Look at Google Play…tons of marketshare,yet falls behind Apple Store in profits. Look at where developers go to make games DESPITE lack of marketshare.

    When will Android folks learn….

    • kcz7

      When will iPhone folks learn to STFU on Android sites, and keep their “Apple invested” opinions to themselves? GTFO with that Apple BS! Here’s an orange for ya. Good day.

      • tiger

        Pull up your panties.

      • kcz7

        Awww how cute! Seems someone feels safe behind their kb to talk smack, but gets butthurt when someone calls them out. Be strong mighty keyboard wielder, be strong. Andddd….. To show good manners, here’s another orange. Good day.

      • tiger

        That was you calling me out?! Lol

      • kcz7

        More along the lines of anyone who goes against your “one track minded” opinion. That’s a more logical viewpoint. Anyway, if you would like to continue this conversation, I’m more than willing to. Entertainment is in the eye of the beholder, and I find your adolescent comebacks hilarious. But don’t laugh too hard or you might soil your panties. However, according to your above comment, I have some spare ones…. I’ll give you a pair to show good manners.

      • tiger

        Ok…lets talk. My original post…was it wrong? If so, then show me the errors of my ways.

        You “called me out” … now, it is your turn…you clearly disagree with me on what i wrote originally…why?

      • kcz7

        My obvious first question is: Do you own a device running the Android OS? If so, how long have you had it and what device? I have been with Android since Nov 2009, and started with the Verizon (original) Moto Droid. I’ve owned, since then, the EVO 4G, Galaxy Note 2, Neptune Pine, and currently the Nexus 5 (got tired of waiting for updates; you already know Android sucks on updates unless it’s a Nexus. +1 to Apple on updates).

        Next question would be do you own any devices running iOS? How long and what device? I’ve been with iOS since Feb 2012, and I started with a iPad2 and currently using the iPad Mini 2. I haven’t owned an iPhone, but luckily the OS is pretty similar between the 2 devices. My dad, mom, and sister, however, have iPhones and I’m usually the one fixing/setting up/ etc etc.

        I’m sorry if I seemed rude, I was really just looking for discussion. If you’re an avid reader of Cult of Mac, Apple Insider, App Advice (etc) then you know there isn’t as many vocal Android commenters on those sites. It does baffle me on how differently the tables turn usually on Android sites. I was just wanting to pick you mind for a second. I’m rather cranky when I first wake up (I work night shift). In closing, I do apologize for the rudeness of my comments.

      • tiger

        No problem on rudeness dude. This is the net…things slide off me! 🙂

        You gave me some background…my turn. I am on SPRINT. I started my wireless ownership with Samsung Epic (the one with pullout keyboard). Then went to Nexus (the one before N4). Then to iPhone 4s, then 5…THEN back to Samsung Note 2. In meantime, i also had Nexus 7 (1st gen). Now, i have two iPhone 5s, ipad mini (1&2), and iPad Air (1st gen).

        As you can see, i have plenty of experience (and paid apps) on both. All Android devices listed above got replaced fairly quickly bc they suck donkeyballs. Now, Note 2 was the best of the bunch by far…it really was decent. Problem? Random crash. Camera sucked. Google movies suck in quality. Google apps are spam more than quality for the most part. The last two have nothing to do with the phone but made my experience worst.

        Worst Android? My Nexus 7…i even have Youtube of all the weird crap that happened to it. Sent it back to ASUS twice; they had to replace the display, battery, charging unit, and something else i forgot. Even after all that, it crashed, ghosting action without me even touching the damn thing, battery dead quickly, couldn’t charge it, etc.. On the 3rd RMA, Fedex LOST MY Nexus! That was really the straw that broke the camels back!

        I can just go to my local Apple store and get quick help and quick replacement of my Apple stuff. With Android, i spent hours on the phone (with either ASUS or Samsung help desk). Apps are so much better on App Store vs. Google Play. Forget about movies! Google Play movies (despite 1080p) looks like VHS quality! No high quality games on Google Play vs iOS. And if there are (e.g. Asphalt 8), then it usually has frame rate drops.

        Ownership experience is everything. Total experience…from buying to customer service to repairs/replacement.

        You see…i start off Android bc i actually prefer Android’s high customization platform…but crap-o-la experience forces me to Apple. My wife knows nothing about all this…she wanted Nexus because it was cheap…lets just say that she despise anything Nexus! My son cannot stand Nexus tablet bc it crashed so many times on him…and he is only 5!

      • coldspring22 .

        Curious, my experience has been opposite of yours. My wife bought an iphone 5 at the same time I got a galaxy note 2. Two years later, iphone 5 is about to go into a trash can with numerous issues, while my galaxy note is as good as new. It’s bee rock solid, great performer during last two years and I would keep it until it totally breaks. My wife will be using a Xiaomi phone soon, as it totally blows iphone 6 out of water for performance and value.

      • Mi Devices ftw

        You might wanna look into one yourself. The note is fine but when you see your wife on her new MIUI phone you’ll wonder why you suddenly can’t do half the things she can.

    • Burt

      And yet Apple’s market share is dropping every year and T-mobile and Xiaomi are still going strong and still part of the competition for the top. Apple’s even dipping into “cheaper” phones like the iPhone 5 case with iPhone 6 guts they released a few months ago. Apple is expecting more dips even after they release iPhone 7 but Google is expected to rake in much more market share and Xiaomi is expanding into even more markets. VR, drones and PCs. Now they are heading into smart watches and roombas!

      When will iSheep learn.

  • tiger

    BTW, i love how this article thinks Xiaomi plan of low product turn-over to be some amazing deep insight plan…hmmm, isn’t that what Apple is doing?! LOL.

    • Scoop

      Well Apple has been copying Xiaomi for years so that proves Xiaomi has the right plan if even Apple is riding the same train.