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Xiaomi’s growth spells early 2015 danger for mobile’s main players

Xiaomi’s growth spells early 2015 danger for mobile’s main players

Chinese mobile-maker Xiaomi has only been around since 2010. But newly released figures show that it sold 61.1 million smartphones in 2014.

That represents a massive threefold rise on the previous year, when it sold 18.7 million devices. Its revenue came in at £7.8 billion for the year, a 135% boost.

These hugely impressive numbers come at a crunch time for Xiaomi’s rivals.

Gartner revealed last month that Samsung had seen sales in China slip by a massive 28.6% in the third quarter of 2014, while LG has been pushed out of the global top five smartphone vendors by Xiaomi.

Sony has been left trailing in the wake of the Chinese upstart too.

This week should see the start of what is now a fightback.

xiaomi logo

Sony is likely to reveal new Xperia Z devices while Samsung could tease more details of its rejigged top–end smartphone line-up.

But it’s at the lower end of the market where the big players are struggling.

Quite simply, they cannot compete with Xiaomi on price and are likely to feel even more of a squeeze as 2015 gets properly underway.

For its part, Xiaomi doesn’t appear to be making huge money from its phones.

Profits weren’t revealed as part of the latest stats, but it’s believed the company is operating on thin profit margins of less than 2%.

The thing is, it seems able to wear these numbers, in the short term at least, as long as it can see off the challenge of bigger competitors.

mobile world congress

It appears to have worked with Samsung and LG and the company will doubtless be aiming to ram home the advantage in 2015, before expanding to pricier phones and into overseas markets.

Any worries have also been eased by Xiaomi raising $1.1 billion in funding from a number of major investors. It’s now valued at $45 billion.

So, can Samsung, LG, Sony and HTC regain lost ground?

Samsung has said it’s going to slim down its profile and is likely to focus on high end phones in 2015 after a disastrous year in 2014.

HTC has said mid-rangers are going to be key, but it’ll need to slash prices and risk its return to growth in order to compete.

smartphones generic new

Sony and LG remain special cases, their phone divisions a smaller part of a wider business.

But it seems none of these traditional mobile-makers can land a punch on Xiaomi right now.

The Chinese company looks as if it’s going to take 2015 by storm and no one’s in a position to stop it.

Category: News
Tagged: industry news

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