The Chinese brand Xiaomi experienced a year of strong growth in 2014 thanks to smartphones offered at aggressive prices, allowing it to quickly gain market share. However, the group's economic model cannot be satisfied with the sale of mobile phones sold with very low margins.
Xiaomi therefore hopes to generate perennial income from a software development activity for applications and services offered on smartphones, tablets and other connected objects. This vision was once again explained by Hugo Barra during a presentation of the company.
The latter therefore stressed that Xiaomi was not so much a smartphone maker that web business which will ensure its profitability by the sale of software, smartphones being only the vehicles of this strategy.
Xiaomi has prospered in the Chinese market but is starting to take an interest in other markets, notably the emerging markets. For established markets, intellectual property issues will need to be resolved first.
This is also perhaps one of the reasons why Xiaomi goes at first sell accessories on the US market, not its smartphones. Xiaomi also mentions the subsidy mechanism of the terminals which could hide the attractive cost of its smartphones.
At a time when others seek to reduce the presence of Google in the Android platform to build alternatives, Hugo Barra indicates that Xiaomi arises in loyal partner actively supporting Android playing only the card of personalization and responsiveness to the features requested by users, which allows it to offer updates every week.
He points out that Xiaomi can count on a base of 40 million active users on its forums, with several hundred thousand topics posted every day. It is one of the strengths of the Chinese brand.
Finally, concerning the issues of intellectual property, which some observers see as a weak point and a brake on its international expansion, Xiaomi indicates to have filed 2800 patents in 2014 and expect to double this volume this year and the following. But the manufacturer also knows that complaints of patent infringement are part of the game and will come sooner or later.