With stock IPO, Xiaomi is now worth three times as much as LG
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Basically any major company doing business in Indonesia sells a rebranded roaming and mobile service there such as HTC.
But no one says HTC is primarily or profitable via digital services rebranding and resell.
The standard isn’t that Xiaomi doesn’t sell any digital services at all, but that it clearly isn’t a digital services company for revenue to any significant extent. So for it to insist that it’ll be making tons of money as a digital services company is clearly false.
It only offers some services required in certain nation’s because without it, its product wouldn’t meet expectations on a minimum level.
It rebrands. If such paltry numbers means Xiaomi is mainly a digital services company, then Coca Cola, Muji, Samsung, HTC are primarily digital services companies as well.
Mi Roaming, Mi Sim Card and there is the MI Wallet, but Im not so sure how it works exactly.
**So Xiaomi does sell digital services on their phones.**
It’s actually 5 times. Xiaomi ist 45bln€, LG is 9bl€
True, but for that kind of stuff, the real cheapo king is Sonoff. They can’t beat that pricing as everything is roughly $3-$20. Broadlink also has much cheaper solutions.
Compared to the above Chinese companies, Xiaomi is actually double the price!
> Their Smart Home tech is just okay but not better than Google Home or alternatives that are mainstream elsewhere.
Actually, their sensors are incredibly cheap compared to the other bigger names in home automation right now (US$49 for a Nest door sensor vs 49 RMB for Xiaomi’s) and works ridiculously well integrating with Google Home/Alexa via open source solutions like Home Assistant or Openhab. Can’t comment on their AI assistant since everything it offers is in Chinese/China-only and it doesn’t offer a truly open API, but I’d recommend checking out /r/homeautomation if you’re into this stuff!
Its affordable but actually standard when it comes to its main market, China. Because they have Vivo, Elephone, etc which all have their own ecosystem of products.
Oppo and Huawei are ‘premium’ there but there’s soo sooo many cheaper smaller sounding brands. Apple is a luxury brand.
At no point is Xiaomi luxury. So they’re much more like Muji. Far from the most expensive, having an eco system, clean branding, but also not that cheap either.
Versus American and European brands, of course they’re cheap as heck, but that’s also because the China market generally cannot afford bigger labels relative to the size of its population.
Indeed, and even then Mi Cloud is only there leftover since their China only models have Google and the app store banned.
There’s almost nothing else that’s actually tangible that makes them a digital services company, so the latter is just hype.
In the other countries they’re expanding outside of China, like India and Taiwan and Singapore and Hong Kong, and elsewhere, they are not offering any addons.
Mijia is just their kickstarter similar. It’s not exactly a real ecosystem. Their Smart Home tech is just okay but not better than Google Home or alternatives that are mainstream elsewhere.
That annual report will be interesting. Right now there’s not enough regulation in China that forces them to be truly honest but I don’t think Xiaomi is in danger. The problem is they overhyped their IPO.
I have a custom ROM on my Mi 6 now so I can’t check, but I recall that even on international devices they sell Mi Cloud storage plans similar to Google Drive, and then there’s small stuff like skins and themes. I highly doubt that’s truly profitable though.
Looking at the barrage of product releases on their Youpin store they are very likely revising their strategy to move away from profiting from directly-to-consumer services, and instead, like you say, focusing on building up a large ecosystem of “Mijia users” via brand awareness and viral marketing, which they can then profit off from partnering products. That TWD250 coupon they were giving out for the IPO celebration isn’t going to net them any profit, but someone’s going to take a look at the Smart Home Kit and click Add To Cart, or the Yeelights, or the rice cooker… All of those sales multiplied by their incredibly large user base would definitely add up to a sizeable profit.
The good thing out of this IPO is that we could stop being armchair analysts and wait for the annual report, of course. 😉
Think Xiaomi as the reverse Apple. Affordable hardware to populate your life, then software services like cloud storage, home automation and more.
Thats precisely my point. True, clean style. Here in Asia though there are many alternatives that are cheaper than Xiaomi. Just not under a clean brand
Their luggage is like $10 more expensive. Their hats are $5 more. Their wallets are triple the price. Their phones are great values but compared to Vivo, and other Chinese brands it’s just okay.
So in that way, they are exactly like Muji except for electronics.
Articles really push it otherwise and so did Xiaomi but I’m not a blind investor. I live not too far from two Xiaomi stores (15 minutes) and I live in Asia. . **Xiaomi sells zero digital services on their phones or otherwise** In fact I use a Mi Max 2. Their cameras connect but the software doesn’t even collect data. I use a third party app that works with the Mi cameras too. None of this is a good business plan for digital services since they offer nothing tangible in terms of business.
Both here in Taiwan and in HK, which I traverse regularly, they do not include an apps store and do not sell anything digitally, as in the MiFit app doesn’t have a paid for premium mode, it does not do anything other apps don’t do for free.
They do however sell everything else at decent prices, including suitcases, the business one which I use all the time.
They do indeed market themselves as a premium lifestyle brand at low prices (but not lower than local competitors here, slightly higher for many things in fact) including hats, sunglasses, suitcases, bags, toiletries, lighting, and so on.
Meanwhile their software, if there’s any involved is free and often doesn’t work that well outside of MIUI and maybe MiFit but I found more utility just using gadget bridge for the latter.
So how exactly are they a digital service company? Apple offers way more digital services. Hell, even Asus offers more digital services, but even Asus doesn’t dare advertise themselves as a digital services company.
Xiaomi does not want to be the next Apple. They said that already 4 years ago, yet people still misunderstand.
I guess this is mainly a misunderstanding some people in the west have, because they believe Xiaomi mainly does phones (and some other electronics), when what they sell is literally everything including food and clothing. But even if it were just phones it would be wrong. They are a digital service company. They make money with their userbase (more like Google and Facebook), not with physical products (Apple). Apple is a premium lifestyle brand.
Just check out a walkthrough of a Xiaomi/Youpin store and you’ll see that it has been a very different for a long time: https://youtu.be/O36IpoWihaI
I never felt Muji is especially well known for it’s prices. I always thought it was style.
Not much since the main gold for Xiaomi is not to win money with equipment but with services. That’s why the 5% profit margin. With services xiaomi has 60% profit margin. That’s the gold for Xiaomi, to sell services. But first they need to fill our houses with their equipments. I have a lot of them at home. Not only my phone. Xiaomi will not be a smartphone seller, it will provide IT services. The future.
Thats a big question. If Xiaomi insists on being the next Apple, then prices will have to raise despite promises not to. If Xiaomi admits its really just Muji except with a focus on electronics, I think the honesty will help it. But who am I to say.
Any thoughts on how this will affect their overall quality and pricing of products?
What a great comment!
That’s some amazing spin. Let’s remember that Xiaomi was initially targeting a $100 billion market valuation. They then revised it downwards to $70 billion. Their actual IPO valued them at a little over $50 billion. And even at that IPO valuation they didn’t receive the post-IPO bump that nearly every major IPO receives, but actually *fell* in post-IPO trading. That’s not really a “way to go!” IPO.
way to go xiaomi!