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China's homegrown smartphone firm, Xiaomi, takes on market with low-price strategy

Michael Kan | Aug. 17, 2012
When Chinese company Xiaomi ended the Thursday unveiling for its second-generation smartphone, the audience, numbering in the hundreds, gave a standing ovation.

Xiaomi's newest phone, however, could further shake up China's smartphone market, putting additional pressure on its competitors, according to experts.

"Overall, I'm impressed with the phone based on the specifications," said Teck-Zhung Wong, an analyst with research firm IDC, who attended the Xiaomi M2's unveiling. "Fans really do seem to love it up and the company seems to have a strong start."

How the company is able to price its product so low was not explained during Thursday's event. But Wong, who was surprised by the pricing, said Xiaomi was likely able to convince its suppliers give them good deals on components and manufacturing.

Fans of Xiaomi were also impressed. In attendance at the event was Luis Lu, 26, who said he will probably buy the handset, after previously purchasing the first generation phone, at a price of 1499 yuan.

"At first, I felt the Xiaomi device wasn't as good as the iPhone. But after I used it for a while, I realized it didn't have much of a difference with the iPhone," he said.

Lu said he also felt Xiaomi was learning from Apple in the way it introduces its new products and focuses on building brand awareness. On Thursday, the company also unveiled an updated version of its first generation smartphone called the Xiaomi 1S, the S standing for Super.

"Xiaomi has become very influential in China," Lu said. But while Xiaomi's newest phone offers high-end specs, Lu said the phone's user experience and localized OS are what he liked the most about the product. "The hardware isn't always the most important," he said. "More important is the user experience."

The Xiaomi M2 will launch in October. It comes with 2GB RAM, 16GB memory, a rear-facing 8 megapixel camera, and a front-facing 2 megapixel camera. Built with a 2000 mAh battery, the phone is also installed with a Chinese localized version of Android 4.1.


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