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Will Xiaomi Be The Wrecking Ball For Other Smartphone Brands In India?

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Xiaomi MI 3

If you are a resident of India who doesn’t happen to live under a rock, you must have heard of “Xiaomi” by now. Haven’t yet? You will, soon. The Chinese company, just over 3 years old, has officially entered the Indian market. The implications? Bigger than we could have anticipated.

Last year, we wrote about how Xiaomi could lead Indian user’s mindshare in future, and seems we are pretty much on track with it or probably even surpass it.

Before we delve into how Xiaomi could change the Smartphone market landscape in India, let’s have a brief overview of the current market situation.

OEMs generally make the biggest chunk of their revenue from selling Smartphones that cost under Rs. 15,000. The Rs. 10,000-15,000 market is indeed the biggest cash cow, and not the Rs. 30,000 and higher flagship market as many would be lead to believe.

There are brands such as Samsung who dominate the market by flooding the same with numerous Galaxy Smartphones. There’s probably a Samsung Galaxy model for every Rs. 500 price increments. And then, there are Indian OEMs like Micromax, Karbonn, Xolo and more who sell 99% of their devices in the (what we call) Value-For-Money or VFM segment.

Earlier this year, Motorola officially marked their entry by launching the Moto G, a device that is priced at Rs. 14,000 and recently took lion’s share in their 1 million unit sales they have achieved in less than 5 months. Oh, and all those handsets were sold via Flipkart, their exclusive online retail outlet. The Moto G has had tough competition from quad-core Samsung and Micromax handsets, but most people would still pick the Moto G for regular Android updates over more powerful specifications that are offered by Micromax or Karbonn counterparts.

Why would someone pick a, say Sony Xperia M2 for Rs. 19,500 over the Mi3? You and I both wouldn’t.

Enter Xiaomi, the company that is literally disrupting the Indian Smartphone market. Xiaomi announced the Mi3 in India earlier this week, and the significance of this announcement is bigger than we had anticipated.

Why? It’s simple – the Xiaomi Mi3 is priced so affordably, it makes every other Smartphone in its price category look like a cow, and every phone twice its price a donkey.

No, really. Jokes apart, the Mi3 isn’t your standard off-the-mill HD display and 1 GB RAM thrown in with a MediaTek chipset offering. Xiaomi has packaged their flagship phone with the same love, quality parts and specifications that made yesteryear’s $650 flagships (Mi3 was unveiled in 2013, in China).

For a low, low price of Rs. 15,000, we are looking at a Qualcomm Snapdragon 800 (MSM8274) chipset, a quad-core part clocked at 2.2 GHz. That’s coupled with the powerful Adreno 330 GPU, 2 GB of RAM, a 5-inch Full HD (1920 x 1080) IPS LCD display that has been praised in many reviews. There aren’t any compromises either; build quality looks top-notch and the device is fitted with a mega 3,050 mAh battery, unlike the 2,000 mAh battery capacity that is usually found in phones at this price range.

Xiaomi has literally pulled a killer bunny (fondly referred to as Mi bunny) out of their bag, and it is here to eat competition alive.

The pricing is very interesting as well; the Xiaomi Mi3 costs $299 in China, but only costs $249 in India.

Surprised? We were too! The company is selling their flagship at an even lower price, making it a hard-to-resist offer. Granted, it is a year old, but is anyone going to complain at this price ?

Once more and more people find out about the Xiaomi Mi3 (their Facebook page for the Indian community recently crossed 10,000 likes), more of them are going to be interested in the handset. All of them are going to realize one of these things – Why should I buy a Moto G over this phone? Or why should I settle for a cheap Micromax knock-off instead of the Mi3?

Some people might even stop looking at phones in the Rs. 20,000-Rs.25,000 range; Gionee Elife E7 is going to have a tough time convincing consumers to pay a premium instead of going for Xiaomi’s offering.

I know, I would put my money on the Mi3 without batting an eyelid.

Another thing that Xiaomi has going for them is that its competitors don’t provide adequate customer support. Granted, Samsung has a good network of service centers, but the same case does not apply to almost every Indian OEMs.

Even the new Chinese entrants are yet to set up a reliable customer support base. Hence, people comparing the Xiaomi Mi3 with another phone from its price range wouldn’t think twice about customer support, since their is virtually none on either side.

Xiaomi’s entry into the market and their subsequent success of failure (highly unlikely) is surely going to be an interesting case study. For now, we cannot wait for this new saga to unfold.

Would Indian OEMs fold under pressure? Will Samsung, Sony and other top OEMs such as LG answer Xiaomi’s challenge with better handsets at cheaper prices? It doesn’t look like they can do much in such a short time.

For now, if Xiaomi is able to meet up to the massive demand that it will surely be facing, it’s going to have a pretty much landslide victory in terms of sales against other Smartphone sellers in India.

In case you are one of the many who are eagerly waiting for the Xiaomi Mi3, keep an eye on Flipkart’s home page on July 15th (next Monday Tuesday) to know more.

  1. […] Will Xiaomi Be The Wrecking Ball For Other Smartphone Brands In India? […]

  2. Prateek Panda says

    I am betting my money on Xiaomi. I’ll definitely be waiting to grab my hands on the Mi3 but honestly, it is for folks like us who actively sought out to but devices that are more attractive in terms of hardware or software. Most people that I spoke to really didn’t buy my idea when I showed my craze for the Mi3. Everyone agreed that the specs are great, but they’d prefer a known brand in their hand.

    Anyways, I am sure these guys will bring in great disruption in this particular price segment.

  3. mohulghosh says

    Interesting opinion! From branding point of view, there are some people who would want to have a Sony in their hands, or an Apple compared to Xiaomi or Motorola.. I suppose more than features, its the branding which leads the sales when it comes to handsets priced more than Rs 20k.. Xiaomi needs to create a brand for themselves as of now.. their features are no doubt the best in the class.. :) After reading this post, I am very much tempted to try out Mi series!

    1. Arun Prabhudesai says

      Mohul, I will tell you one thing. Xiaomi is most bang for buck you will get for any phone. Yes, when it comes to brand name, no one knows about about them because they are a very young company. But in it’s first 3 years of existence, Xiaomi has a notched up a huge 10% smartphone market share. And I don’t see any reason why they can’t do that.
      When Micromax first started out, people had same apprehension. There are far more people looking for VFM phones rather than just brand names…

      What will be interesting to see is how others react – One thing is sure, we are past the days of Rs. 50k smartphones!

  4. Siddharth Vyas says

    Xiaomi devices are really awesome. I have already used one of them previously for particular android project and the main part i.e UI is incredible.Welcome to India Xiaomi.

  5. sriharsha216Harsha says

    i agree it puts my Nexus 5 to shame with its specs for that price..
    what about the software part?
    Its a forked version of android Jellybean if i remember from what I read last time..
    With the new Android L being a completely revamped and futiristic software upgrade,buying MotoG will still be worth it I guess

    1. Arun Prabhudesai says

      Yes, they are MUIU V5 which is a forked Jellybean – but people who use it swear by it. I am sure they will come out with Android L forked version as well!

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