Xiaomi has big ambitions this year after unveiling the Mi2S and Mi2A, and plans to ship 15 million smartphones, as well as expand sales beyond Asia. Co-founder and president Lin Bin, spoke at D: Dive Into Mobile in New York City. Despite only selling Android phones for three years, Xiaomi has generated $2 billion in revenue on 1.7 million phones. While this doesn’t sound like a lot compared to other manufacturers, the Chinese company has adopted an online-only model from the beginning. The phones are unsubsidized, priced at the bill-of-materials, and manage to sell out in minutes. Lin on the success of the Mi2:
“Last year, when we announced the Mi2, for 3-4 months we’d have hundreds of thousands of units available, and they’d be gone within two or three minutes after we posted availability online.”
Since they’re selling phones at the bill-of-materials, there is little room for profit. To make up for that, Lin says that a good portion of profits actually come from sales of accessories. Going from selling 1.7 million phones overall to shipping 15 million phones in a single year, is quite a leap. However, Xiaomi claims to be working hard on distribution, particularly in China where they want to get phones to users within three days after purchase. By expanding into Hong Kong and Taiwan, the company is able to get valuable feedback on if making Xiaomi phones available on carriers, is a good move.
Source: Engadget
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