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Deal with Microsoft notwithstanding, China’s Xiaomi won't be stateside anytime soon

Matt Hamblen | June 3, 2016
Marketing and branding must be Xiaomi’s priorities, analysts say.

Two years ago, Xiaomi was the top smartphone seller in China, with 20% year-over-year growth, but now its revenues there are flat, Narcotta noted. The company was founded in 2010, but by 2014 had shipped 17 million smartphones, representing 211% year-over-year growth, according to IDC.

Xiaomi was the fifth-largest smartphone seller in 2015 globally and was third largest in the third quarter of 2014, according to IDC.

In the first quarter of 2016, Xiaomi fell to sixth globally -- behind Samsung in first place, followed in order by Apple, Huawei, Oppo and Vivo, according to IDC.

In the U.S. alone, Gartner said Apple remained the top seller of smartphones in the first quarter of 2016, with a 36.4% market share, followed by Samsung (26.7%), LG (13.9%) and then ZTE (6.6%) and TCL (4.6%) -- both based in China.

The patent and cross-licensing deal with Microsoft helps Xiaomi in the sense that it helps prevent intellectual property-related lawsuits, said both Moorhead and Jack Gold, an analyst at J. Gold Associates.

Gold sees better prospects for Xiaomi in the U.S. than do some other analysts.

"Xiaomi has lots of cash and wants to be a disrupter in the market and we should expect them to do things like they did in China where they were very successful, although the smartphone market is becoming saturated," Gold said.

"If Xiaomi follows a similar path in the U.S. by selling pretty capable phones at low prices, it could capture a significant share of the market, especially in the lower tiers of smartphones. Competitors like Samsung, HTC, LG and even Apple could be affected."


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