What Exactly Is Xiaomi Lacking In?
摘要： Today’s Xiaomi is more like a business company centered on capital operation and product marketing than a tech company devoted in R&D and technology accumulation.
On October 19th 2015, Xiaomi officially launched its next-gen smart TV Mi TV3 (with a separate MiTVBar and a Mi Bluetooth voice remote control), along with a so called "next-gen toy", the two-wheeled vehicle Ninebotmini.
To be frank, there is nothing new to report about the launch event, since Xiaomi seemed to have adopted the same marketing strategy and attempted to win consumers with a competitive price. After following the entire launch event, I realized how anxious Xiaomi was in developing its Smart TVs and found that Xiaomi was lacking in something crucial to its future development.
What is Xiaomi anxious about?
Undoubtedly, the ultra slim Mi TV 3, priced at 4999 RMB (around 786USD), was the core of this launch event. After all, smartphones, TVs and routers have always been the major types of hardware developed by Xiaomi itself.
Lei Jun, founder and CEO of Xiaomi, went directly to the point after a brief warm-up. While he spent much of his presentation time on the screen when unveiling Mi TV2S, Mr. Lei didn’t do so this time and merely introduced two new features of MI TV3, a 60-inch 4K display as well as MEMC motion compensation. After all, the real innovation, and unique selling point of MI TV3 was not the screen, but the separate MiTVBar.
To be more specific, Xiaomi had separated the input ports, processor, speakers of the TV and put them into a separate MiTVBar, which allowed users to upgrade the performance of the TV without replacing the entire TV and reduced wire clutter by only requiring a single MiPort cable between the MiTVBar and display.
Mi TV 3 was made up of a 60-inch LG 4K display and a MiTVBar (speakers, motherboard and Mi Box in one), which carried a price of 999RMB (roughly 157 USD) alone. In addition, Xiaomi surprised the audience by rigging up the entire launch event venue with only 60 Mi TV3 speakers. Imagine the super acoustic experience of MI TV3!
Obviously, Xiaomi must have taken great pains in preparing this launch event.
However, we should be aware that except for this new launch event, Xiaomi had also held two other launch events for its TVs since the beginning of 2015: one in March (unveiling 40-inch and 55-inch Mi TV2), and the other in July (unveiling Mi TV2S). While Xiaomi upgraded its smartphones once a year, it has upgraded its TVs three times in 2015 up till now. Isn’t it a little bit abnormal?
During another launch event held in June, Xiaomi stated that the sales of Mi TV and Mi Box in total had reached 6.77 million, but didn’t disclose the specific sales of MI TV. Yet, if we take a look at the sales figure in the past two years, we can safely conclude that Xiaomi was to a large degree outperformed by other traditional TV makers in TV business, but its Mi Box seemed to be quite popular and registered a sales volume of over a million.
Since Xiaomi has always been attempting to develop software and hardware together and build an entire smart TV ecosystem, it must fell quite anxious when its TVs seemed not to be successful in the market. Xiaomi has done everything it could to catch up, especially to provide more diversified contents: poaching Chen Tong from Sina, investing 1 billion USD in R$D, cat-fighting with other TV makers, etc. Xiaomi’s efforts paid off: it has already got the broadcast permission from 4 content providers. However, the sales figure didn’t rise accordingly.
In this sense, we can understand why Xiaomi upgraded its TVs so frequently: by releasing new products constantly, Xiao would be able to attract more attention from consumers, sell more TVs and grab larger share of the market.
It is to be expected that the separate MiTVBar will capture much attention from consumers and help Xiaomi promote its Internet contents service on more devices, now that users might as well buy a MiTVBar and connect it with their Sony and Samsung TVs. I’ve got to say it is clever of Xiaomi to develop a separate MiTVBar.
What is Xiaomi lacking in?
Besides Mi TV3, Xiaomi also unveiled a so-called "next-gen toy", the two-wheeled vehicle Ninebotmini, developed by Ninebot/Segway, a smart short transportation equipment operator inside Xiaomi’s ecosystem.
As a matter of fact, Ninebotmini was more like the core of this launch event. Likewise, Mi Water Purifier won more attention than Mi TV2S during the last launch event. Beyond smartphones, Xiaomi has diversified its product line into smartphone accessories such as earplugs, mobile power banks, power boards, to water and air purification devices, which were developed by companies invested by or in collaboration with Xiaomi, and later labelled as Xiaomi’s. (Some of these companies have even changed their names into something similar to “Xiaomi”.
Last year, Lei Jun stated in an interview that Xiaomi would invest in over 100 hardware-makers whose products were all based on MIUI. Up till now, when Xiaomi has already invested in over 50 hardware-makers, a respondent from Xiaomi suggested that Xiaomi had already slowed down in investing more companies and had even changed its investment strategy.
According to Lei Jun, Xiaomi built it ecosystem around smartphones to secure its advantage and get in upper hand in future competition. I do admit there are merits in Xiaomi’s strategy, but it seemed to have gone the wrong direction from business and strategic perspective.
From my perspective, Xiaomi’s plan was to invest in companies whose products were either too expensive or mediocre and improve these products and sell at a competitive price. Indeed, Xiaomi is practicing its slogan and “giving ordinary people access to cutting-edge technology”.
In this sense, Xiaomi was not only investing in these companies, but also guiding and integrating these companies into Xiaomi’s ecosystem, while these companies were also making use of Xiaomi’s reputation to win public recognition. That’s why these companies developed the products, but Lei Jun would help unveil them. Nobody could tell for sure Xiaomi’s strategy was right or not, but it was after all not the common practice of any mature business adventure.
Of couse, Xiaomi was quite wealthy today. Statistics suggest that among all the"unicorns"—companies that have soared to a $1 billion valuation or higher based on fundraising, Uber ranked the first with a total market value of 51 billion USD, while Xiaomi ranked the second with a total market value of 46 billion USD. Yet, it seemed as if Xiaomi was more a business company centered on capital operation and product marketing than a tech company devoted in R&D and technology accumulation.
The gap will become more obvious when we compare Xiaomi with global tech giants such as Apple and Google.
Google is not only focused on some of its most lucrative businesses, such as search, advertising, Android, etc., but also dedicated to developing new technologies in sectors such as life science, satellite, quantum computer, etc. and making major technological advancements in its semi-secret facility Google X. Google never expected to make profit out of these endeavors in the short term.
Apple stands in the other side of the spectrum. Up till now, Apple is very picky (if seen from another perspective, focused) and far-sighted when expanding its product line. It is through concentration that Apple gets to develop some of the most popular and user-friendly products around the world, including iPhone, iPad, Mac, etc.
Of course, Xiaomi might be also secretly developing some cutting-edge technology. Even so, I don’t think Xiaomi would blindly do so regardless of cost.
Bill Gates once said: “It is cutting-edge technology that is changing the world, and it is technology that any business adventure should be based upon.”
Xiaomi might be a master of capital operation, but it lacks something crucial to its future development, that is, cutting-edge technology.
[The article is published and edited with authorization from the author @Tech Info, please note source and hyperlink when reproduce.]
Translated by Levin Feng (Senior Translator at ECHO), working for TMTpost.