Xiaomi Looks to Conquer the IoT Market

Seven years since the launch of Xiaomi’s first smartphone in August 2011, the Chinese electronics and software company headquartered in Beijing is now expected to become the biggest public listing the world has ever seen, with a valuation of at least $50 billion in IPO. Xiaomi is among the top five brands in China—alongside Huawei, Apple, Vivo, and Oppo—and it’s also the second largest smartphone seller in the subcontinent, after Samsung. Its market share in India, which has recently overtaken the United States to become the world’s second-largest smartphone market in the world after China, has grown by over 290 percentbetween Q3 2016 and Q3 2017. According to market researcher IDC, the surge can be attributed to Xiaomi’s brick-and-mortar expansion as well as its partnerships with major retailers.

From Smartphones to Smart Gadgets

But Xiaomi’s huge success cannot be attributed solely to its geographic expansion. “They’re firing on a lot of cylinders,” said seed investor Hans Tung of GGV Capital. “The word of mouth effect that users have and become fans of their product are across the board not just on smartphones, but also on TVs, on a lot of gadgets for home.” In fact, IDC’s latest estimates for the wearables market in the third quarter of 2017 speak clearly: Xiaomi and Fitbit tied for the first place, both with a market share of 13.7 percent, while Apple’s market share was only 10.3 percent and Huawei’s 6 percent. Apart from wearable devices, Xiaomi’s ecosystem of IoT gadgets includes the Mi Robot Vacuum Cleaner, Mi Smart Speaker, Ninebot Mini, Mi LED Desk Lamp, Mi Air Purifier, Mi Water Purifier, Mi Drone, and many others. Most of Xiaomi’s smart gadgets are manufactured under its MIJIA crowdfunding platform, which has become a treasure trove of new products and innovation. Apart from a few notable exceptions, Xiaomi typically sells its gadgets only in China, although they are readily available via third-party retailers on AliExpress and several other websites. Xiaomi products have become so popular and successful around the world that Xiaomi CEO Lei Jun revealed on Christmas day 2017 that “Xiaomi’s IoT platform has over 85 million units of IoT devices, 800 smart devices, and 400 partners,” making it the world’s largest IoT platform for smart hardware.

Xiaomi IoT Devices Are About to Get Smarter

To cement its position on the Chinese market, Xiaomi has recently announced a partnership with Baidu, a Chinese multinational technology company specializing in Internet-related services and products, often described as China’s answer to Google. “Exact details of the tie-up are not being disclosed right now, but the two firms said will immediately explore opportunities in voice recognition, deep learning, and computer vision, in addition to more work with DuerOS,” reported TechCrunch. DuerOS is Baidu’s operating system, and its purpose is to assist enterprise developers in deploying their artificial intelligence solutions. According to Baidu, DuerOS can turn any product with a microphone and speaker into a smart device with world-class AI speech and image recognition technology. Xiaomi is also planning to launch 80 IoT products in South Korea, which is why it has partnered with Naver, the biggest search company in South Korea and parent company of Japan-based chat app firm Line. Xiaomi wants to include Naver’s AI platform Clova in its IoT devices and strengthen its position on the South Korean market.

Conclusion

It is estimated that the number of Internet-connected devices will reach 21 billion by 2020. According to Statista, the global Internet of Things market is projected to grow from $2.99 trillion in 2014 to $8.9 trillion in 2020, attaining a Compound Annual Growth Rate of 19.92 percent. Xiaomi naturally wants to capture the lion’s share of the market, and the company wants to accomplish it by bringing its products to more markets around the world and by establishing strategic partnerships with other tech companies to innovate at a pace very few companies can compete with.