Despite the high-end ambitions of Xiaomi’s larger domestic rivals like ZTE and Huawei, Xiaomi and its colorful founder Lei Jun are often called the Chinese answer to Apple’s iPhone. Similarities between the two smart phone makers include highly knowledgeable, devout followers and a belief that user experience transcends the phone itself. There is also the tendency for Jun to dress like the late Steve Jobs and imitate his presentation manner when he unveils a new product.
Speaking at the Silicon Dragon conference in Shanghai, Xiaomi co-founder Feng Hong revealed that both Lei Jun and he are iPhone users. But as to the iPhone 5? Hong was not impressed. When Hong’s interviewer, Arman Zand, told Hong that the iPhone 5 pales in comparison to the Xiaomi II in terms of “hardware, memory and capacity,”Hong admitted that he “expect[s] more from Apple”.
Still, the specs Zand cited can be misleading on paper and more core is not everything for performance. Benchmark testing lists the iPhone 5 to be nearly as fast as the Samsung Galaxy SIII and faster than all other Android devices, despite the fact the iPhone 5 has a dual-core processor and not a quad-core. Xiaomi II was not included in the testing, however.
Hong made an effort to distance his company from Apple, saying that “Xiaomi does not go after a particular brand.” This conforms to the image Xiaomi wishes to convey of an innovative company that cares only about creating its own products and not keeping up with a competitor. While it may not “go after” Apple, the Cupertino company has clearly been a muse for Xiaomi.
Xiaomi’s Raison d’être
Hong’s answers were decidedly concise and at times limited to one word, which had both his interviewer and the audience laughing.
Zand quizzed Hong on the company’s direction, including whether they were planning to branch out from phones to growing an ecosystem or making other hardware products (Xiaomi recently acquired the makers of MSNlite and began producing a small car that can be controlled remotely by its smartphone). Hong’s response–to an audience that included his own investors—was blunt: “Internally we don’t care, and we don’t know”.
Qiming Ventures and MorningSide, represented by Hans Tung and Richard Liu at Silicon Dragon, previously led Series A and Series B rounds, the latter of which valued Xiaomi at $1 billion in December of 2011. A more recent Series C values the company at a seemingly inflated $4 billion (currently more than declining RIM’s market cap). Given that valuation spike, perhaps Tung and Liu could also laugh at the almost apathetic on-stage demeanor of Hong.
The strategy professed by Xiaomi is to build a user base by selling smart phones at cost. And in the long-run, to make money on value-added services—a parallel of Amazon’s cheap Kindles and big bet on content. However, Hong said that Xiaomi does not target price-sensitive users, but rather the “geeky” consumers who understand their phones inside and out and wants to create an “exciting experience for [their] users”. He said that Xiaomi is not “nationalistic,” and hopes to grow internationally. There have been rumors of Xiaomi entering Europe with Lei Jun reportedly having met with both Telefónica and Vodafone.
Hong said Xiaomi works to provide a highly customizable experience for the user both in hardware and software. One new feature he cited allows users to send a photo to be printed as the back cover of their Xiaomi II phone. I don’t know what the demand for this feature is given the boundless quantity of cutesy cases available to Chinese consumers already, but it certainly shows Xiaomi’s dedication to cater to its users.
Tech Chat #1: Feng Hong (Xiaomi co-founder and former Google China product manager) interviewed by Arman Zand (Senior VP at SPD Silicon Valley Bank, a Shanghai-based joint venture)
Check out Rebecca Fannin’s event page for more info on the Silicon Dragon Conference.
James Hopkins is an American working for Alibaba.com in Hangzhou, China. He previously lived in the tech-heavy district of Nanshan in Shenzhen. The views expressed here are his own and do not represent those of his employer.
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