Xiaomi may be able to launch its first smartphone in the U.S. by late 2018 or early 2019, CEO Lei Jun told The Wall Street Journal. Jun, however, did not reveal the phones that would launch in the U.S. or about the carrier partners. Currently, the company’s U.S. website lists Mi Box set-top box, fitness tracker, smartwatches and smart home devices.
For Xiaomi, the biggest challenge will be to get approval from the U.S. government. Huawei, another Chinese vendor, faced a similar problem when it tried to make a U.S. debut. When the Chinese vendor thought it sealed the carrier deal with AT&T for launching the flagship Mate 10 Pro smartphone in the U.S., the deal fell flat owing to national security concerns.
Jun also acknowledges the fact that expansion in the U.S. could be challenging. Back in 2017, Jun said, “We hope to be an immediate success in the US so we need a lot of time and careful preparation to achieve that.” With a “lot of time,” the CEO possibly means brushing up on the local laws and regulations.
The U.S. smartphone market is saturated, but a few foreign vendors apart from Samsung have managed to get some breakthrough. For instance, Chinese vendor ZTE bagged the fourth place in the U.S. last year. Xiaomi’s debut in the U.S. could prove a setback for the Android vendors. Chinese smartphone companies have the reputation of offering value for money devices, but are mainly popular among the Android lovers.
A major chunk of customers are somewhat dependent on big retailers such as BestBuy and their phone carrier for device support. In such a scenario, the Chinese company needs to forge a deal with the topmost carriers such as Verizon, Sprint, AT&T and T-Mobile. This could, however, lead to an increase in prices as the carriers would take their cut. This, in turn, would lower the competitive advantage that Xiaomi phones are known for.
Speaking to CNBC recently, Xiaomi’s head of international business, Wang Xiang, said the company is closely monitoring the market. “The US market is very important to us but we are very, very carefully building our resources to serve the US consumer,” Xiang added.
The Chinese company has already signed a memorandum of understanding with Microsoft to work together in various areas such as cloud computing, artificial intelligence and hardware. The deal came as a surprise to many who believe that it is rare for a major U.S. company to partner with a Chinese counterpart on AI.
Talking about its carrier strategy, the executive said that in a market where consumers pay for the contracts with telecommunication carriers in order to buy phones, Xiaomi needs to customize its product. Further, addressing the anti-China rhetoric in the U.S., Xiang said he is not worried.
“We are an internet company, we are very open, very friendly to consumers, to the people in different countries,” Xiang told CNBC.
According to Wang, Xiaomi has achieved 100 billion Yuan ($15.8 billion) in sales. However, he refrained from talking about the exact revenue figure for last year, but added, “we can do much more than a 100 billion renminbi in 2018.”
Xiaomi is a big name in China and India. The Chinese company, which is vigorously expanding overseas, opened a third store in Spain last week, and is increasing the number of stores in other key markets such as India.
Xiaomi’s clout in other markets supports a theory that Xiaomi could be debunking a myth, according to which, every smartphone company needs to be successful in the U.S. to make it big. While, the U.S. might need Xiaomi, the Chinese smartphone maker might not rely on the U.S. alone to strengthen its presence globally.
Recent data also suggests that it is not always the U.S. that makes or breaks a smartphone company. At a time when names like Samsung and Apple are finding it hard to maintain their smartphone sales, Xiaomi has managed to take a place in the top five without selling a single smartphone in the U.S., notes SlashGear.
Xiaomi is present in some parts of Europe, and in countries where its value proposition makes more sense. Of course, the addition of the U.S. would be a big feat for the Chinese company, but it is definitely not as critical as it was a few years back.