Subscribe

Xiaomi set to disrupt local smartphone market

Lauren Kate Rawlins
By Lauren Kate Rawlins, ITWeb digital and innovation contributor.
Johannesburg, 19 Nov 2015
The Xiaomi Mi 4 launches in South Africa next Friday and will sell for R3 799, a drop from the R3 999 announced initially.
The Xiaomi Mi 4 launches in South Africa next Friday and will sell for R3 799, a drop from the R3 999 announced initially.

Chinese smartphone brand, Xiaomi, will launch in SA next week through newly established distributor, Mobile In Africa Group (MIA).

MIA is headed by Rutger-Jan van Spaandonk, previously executive director for the Core Group, the official distributor of Apple products in the country. MIA is a new company with links to Core.

However, Van Spaandonk says MIA will have a completely different strategy, as the Apple and Xiaomi products are aimed at markets at opposite ends of the spectrum. "MIA will have a much younger team, with more focus on social media marketing and online retail."

With regards to the Xiaomi product, Van Spaandonk says MIA approached the Chinese brand after noticing similar market trends in Africa and China. "There are essentially two smartphone markets: premium and value-for-money. In Africa, and mirrored in China, people either buy a premium smartphone on contract, or they buy a cheap smartphone for cash.

"The problem comes in when people buy very cheap smartphones with low specifications. Their first experience is bad and they essentially end up using the device like a feature phone; they don't see the benefit of owning a smartphone."

An example of this would be an owner of a cheap smartphone having to switch off Bluetooth, WiFi and GPS to save battery, and having a screen with low resolution.

Van Spaandonk says MIA wanted to get Xiaomi into South Africa because of the company's philosophy of delivering a quality smartphone experience for a low price, to as many people as possible.

Xiaomi will launch two smartphones in South Africa next Friday: the Mi 4 (R3 799) and Red Mi2 (R1 999).

"At these prices, the Mi is competing head-on with other Android-based phones in a market that is already brand-sensitive," say tech analyst Liron Segev.

"It will take great marketing and education to earn the trust of South Africans but the time is ripe. The smartest move of all is partnering with RJ van Spaandonk, which instantly instils trust; not only in the brand but the aftercare service. This will be a big market disrupter."

Market expectations

While Van Spaandonk could not comment on sales projections, he did say Xiaomi intends to become a very significant player in the smartphone market.

He says this will be achieved by taking away market share from other players and growing the smartphone market. He believes the product is a game-changer and will drive smartphone interest.

MIA launched the Xiaomi brand in Nigeria on Monday and says the uptake is more than expected, especially with the Mi 4. Xiaomi will launch in Kenya before Christmas, with other African markets to follow next year.

The Xiaomi story

Xiaomi was founded in April 2010 by Lei Jun, now one of the richest men in Asia, and the initial team was made up of former executives from Microsoft, Google and Motorola.

Van Spaandonk explained that to achieve the company's goal of providing "high-quality technology that doesn't need to cost a fortune," Jun had to get the best manufacturers on board.

The Xiaomi Red Mi2 will cost R1 999. Storage on the device has been increased from 8GB to 16GB ahead of the SA launch next week.
The Xiaomi Red Mi2 will cost R1 999. Storage on the device has been increased from 8GB to 16GB ahead of the SA launch next week.

By mid-2011, Jun and his team had managed to convince Sharp to supply LCD touch-screens, Qualcomm to supply processors, and Foxconn to assemble the new Xiaomi phones.

Xiaomi is now the fourth largest smartphone manufacturer in the world and sold over 60 million smartphones last year.

Xiaomi sells its products very close to the cost price, to keep prices low.

The products are available in China, India, Indonesia, Malaysia and the Philippines, and recently expanded to Brazil. The brand is not available in Europe or the US yet.

At the end of last year, Xiaomi became the world's most valuable technology start-up, when it was valued at $46 billion. It was outdone by Uber this year, which was valued at $50 billion.

Price-conscious

This week, MIA dropped the price of the Mi 4 to R200 less than was initially announced in August. The Redmi 2 also received a specs boost from 8GB internal storage to 16GB, pre-launch.

At these price points, both Redmi 2 and Mi 4 present unbeatable value for South Africans, says Kerry Taoushiani, MIA's marketing executive. "Even if other reputable brands match Xiaomi's specifications, their smartphones are often between 25% and 75% more expensive."

Van Spaandonk says by the end of next year, the operating system on the devices will be available in all official South African languages.

The dual-SIM, LTE-ready Redmi 2 features a fully laminated 4.7-inch HD screen and runs on the Qualcomm 1.2GHz Snapdragon 410 processor. It comes with an 8MP rear camera that has an aperture of f/2.2.

The Mi 4 is one of Xiaomi's flagship devices, featuring a stainless steel frame. It has a 5-inch full HD and runs on the Qualcomm 2.5GHz Snapdragon 801 processor. It has a 13MP f/1.8 rear camera and a front-facing 8MP camera.

The devices will be available for purchase from Dion Wired, Makro and Game next week, or through MTN. Other retailers will follow by the end of the year.

Developers' delight

Xiaomi has its own operating system that runs on top of Android, called Miui. It is customisable and allows users to give feedback and invent new features.

Van Spaandonk explained that in China, a new version of Miui is released each week. "Xiaomi developers code for the first half of the week, then the new version is released over-the-air, and then enthusiasts meet in coffee shops to play with the new features over the weekend."

The enthusiasts will then let the developers know what they liked, what didn't work and provide suggestions. This creates a user-centric experience.

Van Spaandonk says South African customers will be able to give similar feedback, by signing into en.miui.com to become part of the developing community.

He says there is a large 'geek' community in SA who will find this feature amazing as there is limited opportunity to do the same with other brands.

The operating system is also available for download onto other Android devices, so users can play around with the software before investing in the hardware.

Mi 4

Redmi 2

Price

R3 799

R1 999

Dimensions

139.2 x 68.5 x 8.9mm

134 x 67.2 x 9.4mm

Weight

149g

133g

Operating system

Android 5 Lollipop with Miui

Android 4.4 KitKat with Miui

Display

5-inch 1080p (1080 x 1920)

4.7-inch 720p (720 x 1280)

Rear camera

13MP

8MP

Front camera

8MP

1MP

Internal storage

16GB

16GB

Other storage

microSD

N/A

RAM

3GB

2GB

Processor

2.5GHz Snapdragon 801

1.2GHz Snapdragon 410

Battery

3 080mAh

2 200mAh

SIM type

Single-SIM

Dual-SIM

Share