Bob Raikes from our friend site, Display Central, asks…
“Could the deal between Apple and Samsung this week to drop their patent battles really have been driven by a realisation that their real enemy is not each other, but Xiaomi?”
What’s the happened? Let’s keep reading…
The front page of Meko’s Display Monitor last week featured two stories. The first was an announcement of more retrenchment for Toshiba in the TV business, a topic that Display Daily’s Pete Putman has talked about before. The gradual decline of Toshiba’s TV set activities is no surprise, given the history of the TV business, but it was important enough for the front page.
I was keen to get another story about Xiaomi on the front page and that was the story last week that the company had become top dog in China in smartphones. Although Display Monitor doesn’t focus on mobiles (Mobile Display Report does that!), we have run 34 stories that mention them in the last two and a half years. We also reported that they have TVs – see www.mi.com/en/mitv. The company itself is only four years old.
When I was last in Asia, I was told by locals that the brand is regarded very highly. The company seems to be running a business model that is somewhere between Dell and Apple. Like Dell, in its early days, the company sells direct to keep costs down. Sales are online only and we have heard that when it launches products, it sells at around cost, betting that its BOM cost will reduce over time. To make a profit, it has to keep the product selling for a long period, so the specifications have to be very good initially, so that it doesn’t get too far behind over time (we reported from CES that Xiaomi is an early adopter of Nvidia’s Tegra K1).
Manufacturing is by ODMs such as Foxconn and Inventec, so with no channels or manufacturing, Xiaomi is a very “asset light” company and is privately owned. Marketing is on Facebook – it has more than half a million ‘likes’.
Like Apple, Xiaomi has relatively few products, in contrast to both Sony and Samsung. Like Apple, it has really good industrial design. The products are certainly “aspirational”.
Both Dell and Apple have had very, very loyal followings. Personally, I was a really massive fan of Dell until the mid-90s, but after a customer service issue that was so bad that they gave me a free server and a warranty problem on a notebook that meant I had to dump a fairly new product, I cooled off a bit! (However, I remain enough of a fan that the monitor on my desk, which is paid for, is from the company – although another monitor maker could probably tempt me to an upgrade if they need a long term evaluation ).
I was a big fan of Apple more than 30 years ago (I was chairman of the Apple User Group in the UK for several years in the early ’80s and went to the London launch of the Mac), but early issues with compatibility between Apple and the PCs I had to use at work led me away. I never bought into the iTunes/iPhone/iPad model as my general preference is for open systems and standards.
However, you cannot fail to give Apple respect for the fantastic job it has done in innovation, design, execution and marketing over a very long period – and I can understand why others fall under their spell.
Both Dell and Apple have really introduced new ways of doing business and it will be fascinating to see the battle between Xiaomi, Apple and Samsung (Dell having become mainly a systems and IT company). Samsung will be deeply unhappy about being displaced from top spot in China and I suspect that it is the competitor that could really hurt its smartphone business.
It made me wonder… Could the deal between Apple and Samsung this week to drop their patent battles really have been driven by a realisation that their real enemy is not each other, but Xiaomi? – Bob Raikes
This article was originally published at www.display-central.com.