Xiaomi and Microsoft Sign Strategic MoU in Cloud, Devices and AI Areas

Today, Xiaomi Corporation and Microsoft Corporation signed a strategic Framework Memorandum of Understanding (MoU), to further deepen the partnership between the two companies. Microsoft’s globally leading technologies in cloud computing and AI will help in strengthening Xiaomi’s leadership in mobile, smart devices and services, and contribute to the acceleration of its international expansion.

“Xiaomi is one of the most innovative companies in China, and it is becoming increasingly popular in various markets around the world.” Dr. Harry Shum, executive vice president of Microsoft’s Artificial Intelligence and Research Group said, “Microsoft’s unique strengths and experience in AI, as well as our products like Azure, will enable Xiaomi to develop more cutting-edge technology for everyone around the world.”

Wang Xiang, Global Senior Vice President and Head of International Business, Xiaomi, said, “Microsoft has been a great partner and we are delighted to see both companies deepening this relationship with this strategic MoU. Xiaomi’s mission is to deliver innovation to everyone around the world. By collaborating with Microsoft on multiple technology areas, Xiaomi will accelerate our pace to bring more exciting products and services to our users. At the same time, this partnership would allow Microsoft to reach more users around the world who are using Xiaomi products.”

Based on the strategic MoU, Xiaomi and Microsoft’s cooperation will focus on the following aspects:

  • Cloud support: Xiaomi is in the process of rapidly expanding its user base in global market. Xiaomi and Microsoft will explore utilizing Microsoft Azure cloud platform to support Xiaomi’s user data storage, bandwidth, computing and other cloud services in international markets.
  • Laptop-type devices: Xiaomi will leverage Microsoft’s support on joint marketing, channel support, and future product development for Xiaomi’s laptop and laptop-type devices to penetrate international markets.
  • Microsoft Cortana and Mi AI Speaker: Both companies are discussing opportunities to integrate Cortana with Mi AI Speaker. Senior executives from both parties are involved to drive deeper technology integration and collaboration for AI-powered speakers, a market segment projected to grow rapidly in the next few years.
  • AI services collaboration: Xiaomi and Microsoft intend to explore multiple cooperative projects based on a broad range of Microsoft AI technologies, such as Computer Vision, Speech, Natural Language Processing, Text Input, Conversational AI, Knowledge Graph and Search, as well as related Microsoft AI products and services, such as Bing, Edge, Cortana, XiaoIce, SwiftKey, Translator, Pix, Cognitive Services and Skype. This in-depth cooperation in AI technologies and products, on top of Xiaomi’s solid experience in smart hardware, big data, and its smart device ecosystem, as well as the significant breakthroughs in core artificial intelligence technologies and products that Xiaomi has achieved, aims to generate even more synergy between hardware and software to enhance the end-user experiences on Xiaomi devices.

Founded in 2010, Xiaomi has achieved remarkable development as one of the world’s most innovative technology companies. Xiaomi’s fast-expanding product line includes but is not limited to smartphones, smart TVs, and a range of smart home products.

The cooperation between Xiaomi and Microsoft has been long-standing: since 2015, Xiaomi has adopted Microsoft Azure operated by 21Vianet in China to run its Mi Cloud service for smartphone users; in June 2016, the two companies reached a global-scale partnership, and Xiaomi began to pre-install Microsoft Office and Skype apps on its Android-based smartphones and tablets, to benefit its customers with modern workforce and communication tools; at the same time, Microsoft and Xiaomi also reached intellectual property agreements, to help Xiaomi’s product go global compliantly.

Microsoft CEO Satya Nadella (first row, second from the left) visited a Mi Home store in Beijing with Lei Jun (first row, third from the left), the founder, Chairman and CEO of Xiaomi, as well as Wang Xiang (first row, first from the left), Global Senior Vice President and Head of International Business

On October 31, 2017, Microsoft CEO Satya Nadella visited Xiaomi’s retail store with Lei Jun, the founder, Chairman and CEO of Xiaomi, and Satya showed great interest in Xiaomi’s products and services. The strategic MoU signed today, further expands the potential of the cooperation between the two companies, and reveals more possibilities for technological innovations, new products and breakthrough businesses in the future.

Xiaomi unveils three new products at blockbuster event in India, with Redmi Note 5 Pro and Mi LED TV 4 (55) making global debuts

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Xiaomi Smart TVs Make Their Mark

For many people, a smart TV is the hub of their entertainment and smart home. A smart TV allows users to cut the cord and enjoy limitless on-demand Internet content. Today, smart TVs are growing in popularity and preference across the globe, with most of the world’s major TV manufacturers making smart TVs.

Xiaomi established its Mi TV team in 2012, with the ambition of “building the world’s best smart TVs that everyone can afford” in accordance with the company’s core value to offer consumers high-quality and well-designed products at accessible prices.

Back then, during an internal meeting, Lei Jun, our founder and CEO, told the team that because the company has already put a great number of small screens in people’s hands through Xiaomi’s successful smartphone series, there was now an opportunity to put larger screens in people’s homes. We therefore set out to create smart TVs that followed our product philosophy of being  as user-friendly and as “smart” as possible. Other than delivering Internet services, our TVs also act as a hub for our wide array of smart home products.

Wang Chuan, our co-founder who leads Mi TV operations, has deep experience in the TV industry and we were fortunate he was able to bring this expertise and understanding of hardware and supply chains to Xiaomi.

Despite this, it was a challenging start for our Mi TV team. Wang Chuan recalled his experience of visiting nine suppliers in eight cities within five days. Additionally, the TV engineers had to stay at the factories for three months to make sure that the entire manufacturing process met our strict standards. Their hard work finally paid off as Mi TV has become the fastest growing TV brand in China in 2017, even amid an overall market downturn. In fact, in last September and October, Mi TV was named the bestselling smart TV brand on Tmall and JD, China’s leading e-commerce platforms.

Innovation, the key to our success

Wang Chuan attributes Mi TV’s success to our relentless exploration for innovation. The Mi TV includes multiple innovative features including:

11-key remote control

Our first TV product, Mi TV 1, running on our MIUI system, was announced in September 2013, bringing a simplified smart TV interface and the innovative 11-key remote control.

Remote controls used to come with dozens of keys, easily confusing consumers. We solved this pain point by removing unused keys, simplifying the user experience.

Independent soundbar

Mi TV 2, which was announced in 2014, came with an independent soundbar with nine built-in speakers and a subwoofer, which significantly improved sound quality while watching movies or playing games.

Innovative modular design

Mi TV 3 was crafted with a modular design approach when launched in 2015, redefining the 60-inch 4K TV industry in China. It was separated into two parts: a 60-inch LG true 4K display and the Mi TV Bar, which incorporates the motherboard, Mi Box content and a world-class independent sound system. As the Mi TV Bar could be paired with any screen that has a HDMI port, with a Mi Port-to-HDMI cable, users could simply purchase a Mi TV Bar if they wanted to upgrade their old TV for a much lower cost than changing the entire TV set.


The content first PatchWall system

Besides making updates on the hardware, “content first” has always been our Mi TV team’s guiding theme. Mi TV has become China’s largest TV content hub by partnering with the country’s top video websites including iQiyi, Tencent Video, Sohu Video, and PPTV.

We reached another milestone in September 2016, at the launch event of Mi TV 3S, where we announced our own AI TV system PatchWall, which truly amplifies the content and user experience. It can predict content based on what users have watched to provide more accurate recommendations through deep learning, and feature users’ favorite on the homepage.

PatchWall proved to be a big hit in China’s smart TV market, winning awards including “the best TV OS in 2016”.

Voice control

Furthering our TV’s position as the hub of the smart home, we announced the Mi TV 4A in March 2017. This model integrates voice commands to PatchWall, so users can verbally tell their Mi TVs to search for a particular movie. They can also ask their TVs to control connected Mi Ecosystem products, such as a Mi Air Purifier and a Mi Robot Vacuum.

Designs

We’re always exploring ways to improve our craftsmanship, and it’s been noticed by our fans and industry alike. Mi TV 3 has won the world-renowned Red Dot Award 2016 for its design, and now Mi TV 4 offers the world’s first 4.9 mm, super slim body which is almost frameless.

“Today, I think we’ve reached our goal and all the hard work has truly paid off,” said Wang Chuan, who couldn’t help but get emotional during the launch event for Mi TV 4 in May 2017.

And Lei Jun, who had been waiting quietly in a backstage VIP room, was ready to give Wang and the Mi TV team his warmest congratulations.

After crossing RMB 100B revenue milestone, a new journey for Xiaomi begins in 2018

This is Lei Jun‘s letter to all employees at our year-end gala, our most important annual event.

Dear Xiaomi colleagues,

Happy New Year!

2017 has been an extraordinary year for Xiaomi. It was a “turnaround year”, but more importantly a “leapfrog year” — a critical year in breaking new ground for our future as we embark on a new journey.

  1. Crossing the RMB 100B revenue threshold

In October 2017, we exceeded the revenue goal of RMB 100 billion set at the beginning of the year. I checked — and found out that to achieve this milestone, Apple took 20 years, Facebook took 12 years, Google took nine years, Alibaba took 17 years, Tencent took 17 years, Huawei took 21 years.

Xiaomi has taken only slightly over seven years. We are very likely to enter the Fortune Global 500 list of companies this year.

  1. Three reasons for the successful rebound in smartphone sales

Due to the improvement of our turnover capabilities, our global shipments have improved significantly since Q2 2017 — Xiaomi is back in the top 5 smartphone brands. As per IDC, we have become the world’s #4 smartphone brand in Q4 2017 in terms of shipments. Even with the overall smartphone market declining 6.3%, we managed to maintain a year-on-year growth of 96.9% — Xiaomi was the only brand with continuous growth, demonstrating the support and recognition we received from our users.

How did Xiaomi achieve this turnaround? This is because we use a telescope to look at innovation, and a microscope to examine product quality. Innovation determines how high we can fly, while product quality determines how far we can go.

1) Relentless pursuit of technology innovations, release of Surge S1 and leading the smartphone industry with Mi MIX 2

Xiaomi is driven by an engineering culture and innovation is in our DNA. In 2017 we grew from focusing our innovations on single products to a more systematic approach.

Early last year, Xiaomi launched our first chipset Surge S1 and successfully put it into mass production. We became the fourth company in the world with the ability to design and manufacture both chipsets and smartphones.

In Q3 last year, we launched Mi MIX 2, becoming a leader in the full screen display era, while the industry continues to follow this trend closely. It is the first time a Chinese consumer technology industry is leading the world’s evolution of technology.

Meanwhile, we’ve built the world’s biggest IoT platform with many advanced smart devices in our ecosystem and continuous investment in cloud services. We are also among the first to launch AI products in China.

So far, we have applied for more than 24,000 patents globally with 5920 of them granted, among which half are global patents.

2) Firm focus on quality, showing significant improvement

Quality is the lifeline of our company’s development. In early 2017, Xiaomi set up its Quality Control Committee with me as chairman. The quality of Xiaomi’s products and services is the most important mission of the company and we will improve product quality regardless of cost.

After a year’s efforts, our quality has improved significantly based on our original standards and these efforts have been widely recognized. Recently, Xiaomi was among the top ten in the “Made in China 2025” quality award, and I was also honored to receive a Quality personality award and was elected as Deputy Chairman of the China Quality Committee.

3) Rapid growth in our global business, with Xiaomi becoming #1 in India and global markets flourishing

We are present in 70 countries and regions so far globally and became top five in 16 markets. India is an extraordinary example. According to multiple research firms, starting Q3 last year, our smartphone market share in India has become number one. Also, with Indonesia representing Southeast Asia, Russia representing Eastern Europe, and Spain representing Western Europe, all our markets have shown strong growth.

  1. Bumper crop of design awards

Good design is a key part of the user experience, and right from the start, it has been an important focus for Xiaomi. In fact, two of our co-founders come from a background of industrial design and have extensive experience in the field. Our ongoing investment in design was greatly recognized in 2017 when we received a host of design awards, including four major awards (IDEA Gold, iF Gold, Red Dot Best of the Best, Good Design Best 100). Led by Mi MIX and Mi MIX 2, five Xiaomi smartphones bagged international design awards. The Mi MIX series was even displayed as exhibits by a range of top museums including Centre Pompidou in France, Finland’s Design Museum and Germany’s Die Neue Sammlung.

Our success comes from the core of our business model: Winning the lasting trust of our users

Amidst the difficulties and challenges we faced, we still achieved amazing results. This victory is possible only because of the effort that our 18,000 employees have put in, the unrelenting support of our Mi Fans, and ultimately Xiaomi’s business model and values.

2017 holds a deeper meaning for us — alongside our miraculous comeback, doubts about our business model have been entirely crushed. Our business model has been thoroughly tested and we have gained a lot of confidence that we are on the right path, with the right values and the right culture.

We believe that rather than pursuing short-term gains in terms of hardware profit, making sure that our products have a good user experience will enable us to succeed in the long term. Instead of many layers in the distribution channel adding multiple costs to a product, honest pricing will win our users’ hearts. As long as we continue delivering products that are innovative, powerful, with high quality and great design, and with an honest price tag, we can win the lasting trust of our users.

And winning the lasting trust of our users is the most important thing to us. Some users have said that they can walk into a Xiaomi store, close their eyes and buy anything, because they are confident that our products offer the best quality and price. This is a really strong affirmation for us as this is exactly the ultimate goal we are pursuing. By continuing to win the trust of our users, our users will choose our products without thinking twice, and our highly efficient business model can be truly realized.

A new journey in 2018: Expanding around the world and staging a comeback in China

2018 marks the start of a new journey for Xiaomi, and it is bound to be a magnificent year. We have built a solid foundation over the last seven years, and we will ride on this momentum for greater expansion, growth and quality improvement.

While continuing to focus on technology innovation and quality improvement, we will also put in a lot of effort in our overseas expansion. In 2017, I went to India three times, Indonesia twice and Vietnam once, and I saw huge and exciting opportunities wherever I went.

We have entered more than 70 markets globally and established a leading position in many of them. But this is just a start. There is still a lot of room for growth in the markets we are present in, and we have yet to enter many more markets around the globe. Overseas markets represent huge opportunities for us and we need to give more support in terms of strategy, resources, and localized product development, as well as send more of our employees out to the rest of the world.

On the domestic front, we have to start a full counter-attack and accumulate small successes into a full victory, sparing no effort to ensure that we have the ultimate victory in 2019.

In 2018, the Chinese smartphone market is poised to experience a decline for the first time after more than a decade of growth. The market is consolidating while the competition  becomes more and more brutal. There is no turning back for us and we have to charge forward. The Chinese market is Xiaomi’s foundation. It is the biggest consumer electronics market in the world and the most competitive one. Only by winning in the domestic market  can we have enough support for global expansion. Only by winning in China, can we win in the rest of the world.

So this year I am setting a new goal: We will regain the #1 position in China within 10 quarters.

In this battle, we should move firmly forward and set up command center at the front line. We cannot afford to lose any province, city, county and community. We should remain brave and alert, and fight to the end.

This requires us to have strong management and organizational capabilities on all fronts. So from now on, we will nurture and promote a fleet of young and capable managers, creating a more dynamic and progressive team. We will make sure that capable, ambitious, aggressive and daring talent can learn how to fight and grow rapidly.

To everyone at Xiaomi, thank you all for your continued hard work! I hope you grasp all the opportunities in this great era and bravely shoulder your responsibilities. Let us embrace the great opportunities and challenges, and have the ambition to build a great business! Let us take on the mission of delivering innovation to everyone in the world, and write a new chapter in Xiaomi’s journey!

Lei Jun

2/7/2018