Open letter from our Chairman

Thank you for your interest and support for Xiaomi. As you read this letter, I hope you not only see a fast-growing and thriving company, but more importantly, understand how we pioneered an amazing, innovative business model underpinned by courage and trust.

In this letter, I would like to share my personal thoughts on Xiaomi and what we strive for.

We are more than a hardware company. We are an innovation-driven internet company

Xiaomi is an internet company with smartphones and smart hardware connected by an IoT platform at its core. Our mission is to relentlessly build amazing products with honest prices to let everyone in the world enjoy a better life through innovative technology.

Every day for the past eight years, our vision to be friends with our users and to be the “coolest company” in the hearts of our users has motivated us to pursue innovation and maintain an unwavering focus on quality and efficiency. This has resulted in us continually achieving many ground-breaking milestones.

We founded Xiaomi in April 2010. At the time, my co-founders and I had a simple idea—to create a very cool smartphone that we would personally love. Among Xiaomi’s eight co-founders, six of us are engineers and two are designers. All of us are hardcore fans of technology.

“Amazing products” and “honest prices” come hand-in-hand. They are inseparable. Only through building amazing products that well exceed people’s expectations and offering them at honest prices, can we win over the hearts of our users. Pursuing innovative technology and outstanding design is in our DNA. Our engineers are obsessed with pushing the boundaries of technology, and they repeatedly craft every minute detail to ensure our products completely exceed our users’ expectations. We have the courage to break with convention and constantly improve ourselves, and these are the key reasons why we have been able to gain our users’ sustained trust and appreciation.

We promote a bold innovative culture, not limited to technology. We are innovative not only in smartphone technology, including materials, displays and SoCs, but also in design, where we have received over 200 globally acclaimed industrial design awards in the past few years. We have a unique “triathlon” business model and have built a one-of-a-kind ecosystem of companies. We have a unique engagement model with our online users, as well as a highly efficient new retail strategy incorporating both online and offline. The spirit of innovation is deeply ingrained in everything we do and motivates us to accelerate our exploration of uncharted waters.

Currently, we are the world’s fourth-largest smartphone company. We have created many smart hardware products, among which many are leaders in their respective categories. We have also built the world’s largest IoT platform with over 100 million connected devices. In addition, we have 190 million MIUI monthly active users who regularly use our innovative internet services.

What makes us even prouder is that we have completely transformed the industries that we participate in. We have driven the rapid adoption and quality improvement of smartphones in China, laying a strong foundation for the rise of the mobile internet in the country. The rapid development of mobile payments, e-commerce, social networking, and short-form videos in China can be largely attributed to the penetration of the mobile internet into the lives of hundreds of millions of people. China is now the world’s largest smartphone market with a strong and vibrant mobile internet industry. We believe our contributions to this have been widely recognized.

Good companies make profits, great companies also win over people’s hearts. We pride ourselves even more in being a technology company with a rare “fan culture.” We have a large global community of “Mi Fans,” passionate users who are intensely loyal to our brand, highly engaged on our platform and actively contribute feedback and feature ideas to our product development.

We pride ourselves even more in being a technology company with a rare “fan culture.”

After a successful rebound, Xiaomi’s business model has been proven again

As a young Internet company, Xiaomi has conquered many challenges. In 2016, our smartphone sales declined. It was clear to us that because we grew so quickly in our early years, we did not have an adequately strong foundation to face all the challenges in front of us at that time. We deliberately slowed our growth to focus on strengthening three key aspects of our business: innovation, quality and supply management. In 2017, Xiaomi successfully delivered on these key aspects and quickly returned to rapid growth.

As far as we know, apart from Xiaomi, there has never been another smartphone company that has successfully rebounded after a decline in sales.

This was a turning point for Xiaomi. This experience was invaluable for us. We strengthened our management capability, grew our talent pool, broadened our technology foundations and enhanced our supply chain and production capabilities.

More importantly, our business model was tested and proven again.

Xiaomi is more than a hardware company. We are an innovation-driven internet company. Although our hardware business is essential to building our user base, we do not expect it to be the main source of our profits. We maintain excellent design and outstanding quality in our products, while pricing our products as close as possible to cost by selling them to users through highly efficient online and offline new retail channels. We then provide our users with comprehensive internet services.

This is our unique “triathlon” business model, which encompasses hardware, new retail and internet services. Xiaomi’s achievements so far illustrate the strength and resilience of our model. Within 7 years of our founding, our annual revenue exceeded RMB100 billion, achieving a growth rate that many traditional companies are unable to match.

The increase in efficiency comes from lowering operating costs, especially sales and marketing costs. Xiaomi’s unique business model ensures that our products are high quality and priced honestly, which is the foundation of our users’ trust in us.

We pledge that our overall hardware net profit margin will never exceed 5%

During the early years of Xiaomi’s founding, we had a grand dream: to improve the efficiency of the entire business world.

For example, in China, a shirt that costs US$15 to produce may retail for as much as US$150. This is a shocking markup of 10 times. A pair of shoes may be marked up by 5 to 10 times, and a tie can be marked up by 20 times. The list is endless.

It has always been difficult for me to understand why businesses are so inefficient. Why do users have to bear the costs of inefficiency? Cost reduction efforts are usually focused on reducing production costs, which may account for only 10% of total costs. Rarely do companies focus on eliminating the inefficiencies in sales, marketing and operations, which may account for 90% of total costs.

Xiaomi has the will and determination to revolutionize the industries that we participate in through relentlessly pursuing cost-efficiencies.

At the beginning of 2011,  during our first employee annual meeting,  I told more than 100 employees and their families that we wanted to make smartphones with the best performance and user experience, and sell them for only US$300. At that time, similar smartphones were selling for more than US$600.

Great companies are always focused on creating quality products and selling them at better and better prices so that users can get their money’s worth.

As Xiaomi continues to progress, we ask ourselves: what has remained constant in the ever- changing business world?

Our answer is that users have always expected amazing products at honest prices.

Many of our users tell us that when they browse Mi Store or visit a Mi Home, they can buy any of our products with full confidence, because they know these products have the best quality  and price. When I hear this, I know that all of our energy and efforts are worth it. This is ultimately our goal.

Our users’ trust is the foundation of our business and efficiency is the soul. As long as we continue to earn the trust of our users, our business will continue to perform well. A company that is able to achieve world-class efficiency will have the ability to survive multiple economic cycles, continuously seize new opportunities in the industry, and sustain excellent operational performance in the long run.

“Amazing products, honest pricing” comes with real action. At this point, I would like to pledge to our existing and potential users: starting in 2018, Xiaomi’s hardware businesses’ overall net profit margin will not exceed 5% per year. If the net margin exceeds 5%, we will return the excess to our users.

It is our belief that delivering sustained, high quality user experience is more important than pursuing one-time hardware profits. Focusing on efficiency is more important than short-term profits. We are confident that maintaining reasonable profits will inevitably become an industry trend. Blindly pushing for higher margins will not be sustainable.

Therefore, I would like to emphasize that we will focus on upholding our users’ and our company’s long-term interests, which in turn creates more value for our shareholders.

It is our ultimate commitment to efficiency to cap our hardware business net profit margin at 5%. We know that it may take time for everyone to fully embrace our ideals. However, time is on our side. Our steadfast determination and execution will eventually help us to realize our dreams.

Building an open global ecosystem, our potential has no boundaries

Today, we present ourselves to you as we prepare to enter a new stage in our journey. We believe that the potential of our global business is only limited by our imagination.

We are building an open global ecosystem, and not a walled garden. To let everyone on earth enjoy a better life through innovative technology, one “Xiaomi” is not enough. We need to incubate and partner with at least 100 other “Xiaomis” in order to successfully build a rich and vibrant new global business ecosystem.

With our unique ecosystem model, we have mobilized many like-minded entrepreneurs. We are not alone. Together, we have created a comprehensive suite of products that revolve around our smartphones, including mobile peripherals, smart hardware and lifestyle products. Currently, Xiaomi has invested in more than 90 IoT and lifestyle companies, and together, we have changed many industries. In the future, our ecosystem will get even bigger.

We are not only changing industries in China, but also elsewhere in the world. Among the more than 70 countries and regions that we have entered, we are number one in India in terms of smartphone market share and are among the top 5 smartphone companies in 15 countries. We will continue to prove that Xiaomi’s business model can be extended globally at a rapid pace.

Building a global ecosystem has provided Xiaomi with more opportunities for long-term development, expanded our boundaries, and further strengthened our foundation. With the era of big data and AI upon us, we believe that the high volume of data generated by our ecosystem will allow us to better understand our users’ needs and give us a significant edge to offer improved products and services.

The spirit of engineering runs in our veins. This spirit drives us to relentlessly explore the most advanced technologies in order to benefit as many users as possible and to be the coolest company in the hearts of our users. We believe that everyone in the world should enjoy a better life through innovative technology.

Fundamentally, the Internet is all about transparency, efficiency, and equality. We want to allow everyone, regardless of gender, ethnicity, religion, nationality, or education level, to enjoy the benefits of technology.

This is the goal that all Xiaomi employees and I are working tirelessly for.

Thank you for your interest in Xiaomi. Together, I believe we can create a paradigm shift of efficiency in the business world and use technology to improve the lives of many.

To gift honesty to business, to gift warmth to technology, to gift happiness to everyone, our mission has no boundaries, and we have only just begun. We have changed how hundreds of millions of people live, and we will become a part of the lives of billions of people globally in the future.

Good things happen to good people. Please join us on our journey. Always believe.

Sincerely yours,

Lei Jun (Founder, Chairman and CEO of Xiaomi)

Xiaomi’s hardware business will have an overall net profit margin that will never exceed 5%

To all Xiaomi employees:

Today is a historic day for Xiaomi. At the Mi 6X launch event in Wuhan earlier today, we promised our users that our hardware business, including smartphones, IoT and lifestyle products, will have an overall net profit margin that will never exceed 5%.

Why would we do this? Because we are Xiaomi.

1. A 5% limit on hardware net profit margin is necessary for our business model

Two days ago, Xiaomi’s Board of Directors approved my suggestion. Starting today, we officially promise our users that our hardware business, including smartphones, IoT and lifestyle products will have an overall after tax net profit margin that will not exceed 5% per year. If the margin crosses 5%, then we will find a way to return the excess above 5% to our users.

If we sell our products at close to cost and return value to our users, then we can earn the long-term support of our users. Aiming for large volumes with small profit margins will still result in suitable hardware profits for us in the long term.

In addition, we are different from traditional hardware companies. Xiaomi is an internet company with smartphones and smart hardware connected by an IoT platform at its core.

We have created a unique “triathlon” business model, encompassing hardware, internet service and new retail. We maintain excellent design and outstanding performance in our products, while keeping our products as close as possible to their cost price. In addition, we deliver products directly to users through highly efficient online and offline retail channels, including our self-operated channels, while providing them with comprehensive internet services.

In the past eight years, our business model has been challenged again and again. During the most difficult times, we have faced major obstacles. Xiaomi is the only smartphone in the world that has rebounded after a decline in sales. This miracle, coupled with the results we have achieved as of today, shows how relevant and advanced our model is.

In China, a single piece of clothing that costs 100 RMB can be sold for 1000 RMB in a shop, which is a shocking markup of 10X. A pair of shoes can be marked up by 5-10X, and a tie can be marked up by 20X. The list is endless.

It has always been difficult for me to understand why consumers have to bear the costs of this inefficiency. This is why Xiaomi has the will and determination to revolutionize the industry’s cost-efficiency. We do this by putting in every bit of effort to create quality products and maximize value to users.

Cost efficiency is at the heart of business competition, and a 5% limit on our overall hardware net profit margin is evidence of our high cost efficiency. This applies not only to smartphones. Previously, 10,000 mAh powerbanks were priced above 200 RMB, whereas our price point was 69 RMB. Mainstream air purifiers were priced at several thousand RMB, while we have managed to price our air purifiers within 1000 RMB. Across various product categories, we have successfully launched the best products and kept them close to their cost price, thus revolutionizing the entire industry and allowing these products to be available to the masses in a short span of time.

Today’s launch of Mi 6X is an excellent case in point. As a strategic product for our new retail channels, Mi 6X is equipped with the high-end Qualcomm Snapdragon 660 processor and the latest AI technology. Although products of similar performance, technology or even inferior configuration are priced at around 3000 RMB, we continue to stay close to our cost price, pricing it at 1699 RMB, which is almost half the price of our competitors.

 

2. Quality products with honest pricing are two inseparable concepts, and is the best way to repay users’ trust

In the past eight years, we have continually asked ourselves this question. Historically there have been many changes in the business, but what has remained constant?

Xiaomi’s answer is this: Users have always expected quality products at honest pricing.

“Quality products, honest pricing” is not just an empty saying, nor is it a statement to compliment ourselves. In order to truly execute this mission, we need sincerity and the determination to restrain greed.

Limiting our hardware net profit margin to 5% is our ever-lasting promise to our users and our goal for ourselves.

Quality products with honest pricing are two inseparable concepts. If the product quality is not high enough, users will not enjoy it no matter how low the price is. We need to ensure that we keep within the 5% limit on hardware net profit ratio while maintaining competitiveness at the same time. To do so, we need innovative technology and outstanding design, in order to launch products that exceed our users’ expectations. Simultaneously, we need to maintain honest pricing; only then will we able to touch the hearts of our users.

This belief is the foundation for our ceaseless motivation to explore and continually innovate. This belief is how we were able to launch one of the most innovative full screen technologies in the industry with ceramic technology. This is also the reason we have won over 200 globally acclaimed design awards.

In the past 8 years, I have had so many unforgettable moments at Xiaomi, including the first time we heard a ringtone from the first Xiaomi phone, the first time we received a gift from a Mi fan, and the first time we heard that a Xiaomi smartphone was being added to a museum collection. Among all these moments, nothing can surpass the feeling of hearing a user say that they can walk into a Mi Home, and buy any product with full confidence, because they are know that our products offer the best quality and price. When I hear this, I know that all our effort and energy have not gone to waste.

Why do our users trust us? It is because we relentlessly pursue innovation. In our users’ minds, we have established ourselves as a high-quality, well-designed and high value brand. They trust that as long as it is a Xiaomi product, it will have the best quality and price.

Xiaomi employees, our users’ trust is the best form of validation and our most valuable asset. We will not allow users to be harmed in the slightest. Our company can progress only by continuously winning our users’ trust.

3. Maintaining reasonable profits has historically been important for a company’s progress and is the only way for us to fulfill our mission

If we look at historical trends, whether in the automotive or PC industry, the great companies that have changed the world always make things lower in price and available to even more people.

Xiaomi is an engineering-led company. Engineers are constantly looking for the latest technologies to benefit the public and change the world.

Our mission is to relentlessly pursue great products with honest prices so that everyone can enjoy the benefits of technology.

In the past eight years, our high-performing and well-priced smartphones have raised the standards on performance and quality in the entire industry, contributing significantly to the rise of the mobile internet in China. We are now looking to extend this positive influence to the entire world.

Beyond smartphones, we have replicated our business model and strategy to over 100 Mi Ecosystem IoT and lifestyle product companies, which has accelerated the adoption of a smarter lifestyle and helped to build the world’s largest IoT smart home platform. We have created high-quality everyday products that are priced honestly, allowing more people to experience a better through technology.

We will live out Xiaomi’s mission by strictly following the 5% limit on our overall hardware net profit margin.

We have always firmly believed that the pursuit of product experience is more important than that of one-time hardware sales profits. Instead of adding on costs from various channels, we believe in providing quality products at honest prices.

Going forward, maintaining reasonable profits is an inevitable industrial trend.  Any move pushing for high gross margins will eventually reap no rewards.

Bearing in mind our values and legacy, we have set a hard limit of 5% hardware net profit margin. At present, the company has exceeded 100 billion RMB in annual revenue and has nearly 20,000 employees. In the future, Xiaomi may have higher revenue and become a larger organization. However, this hard limit will always remind every one of us of our ideals and our initial ambitions. As I mention ideals, today’s Mi 6X launch has a special meaning to me. This is because the launch event is at my alma mater, Wuhan University, which is where my dream started.

20 years ago, in my first year of university, I was in the library and read Fire in the Valley, a book that changed my life forever. After reading that book, my heart was not at peace for a long time, and I walked around the track at the sports field at Wuhan University multiple times. The fire within me was ignited, and from then on I was determined to create a great company and influence as many people as possible.

Going back to my alma mater today, I realized the fire within me is still burning as brightly as ever.

My fellow Xiaomi employees, eight years ago, we also ignited that fire within us, and that was just the beginning of Xiaomi. Today we have changed the lives of hundreds of millions, and in the future we will become a part of the lives of billions!

Lei Jun

Wuhan University 4.25.2018

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

【News】Xiaomi CEO Lei Jun makes special appearance at Qualcomm’s second annual Snapdragon Technology Summit Keynote

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An inside look at Xiaomi India

Lei Jun (on the right), founder and CEO of Xiaomi and Manu Kumar Jain (on the left), Vice President of Xiaomi and Managing Director of Xiaomi India

Editor’s note:
We have become the number one smartphone vendor in India in Q3 2017 as per IDC. With a market share of 23.5% and 9.2 million smartphones shipped in the quarter, Xiaomi has become the fastest growing smartphone brand in India, surging nearly 300% percent year-on-year! The following is a letter from Manu Kumar Jain, who oversees Xiaomi India.

Three years ago, we started our India journey…

We started with a clear goal in mind: to create high quality products and offer them at prices that allowed us to bring our innovation to everyone. We didn’t have a big team or a big budget. What we did have was extremely innovative products, a handful of dedicated people, the backing of our Mi Fans and lastly, a clear goal to disrupt the market.

We were told that our dreams were too ambitious. We were told that we would fail. Like the hundreds of startups that have come and gone, we were told we would just be another brick in the wall. But here we are three years down the line, achieving the impossible.

I’m really happy to announce that today, Xiaomi is the No.1 smartphone brand in India. This is, without doubt, the biggest feat we’ve achieved since entering the Indian market.

To put things into perspective, we started our India journey in 2014. Based on what we know, no other brand has ever managed such a feat in India within such a short period of time.

To make it easier to digest, let’s crunch on some numbers. As per IDC’s report for Q3 2017, Xiaomi India shipped 9.2 million units in this quarter and commands a 23.5% market share.

Some other trivia from the IDC report which I’d like to share with you:

  • We continue to be the fastest growing smartphone brand in India with a year-on-year growth of nearly 300%.
  • We have witnessed a 91% growth from last quarter to now.
  • With a 51% market share, we continue to maintain leadership in the online smartphone market for three consecutive quarters.
  • We started building our offline channel earlier this year, and within just two quarters, we’ve managed to double our offline sales and are the fourth largest brand within the offline segment.
  • The blockbuster Redmi Note 4 continues to be the #1 best-selling smartphone for the third consecutive quarter, a feat absolutely unheard of for a 10-month old product.
  • Three of the top five selling smartphones this quarter are Redmi smartphones – Redmi Note 4, Redmi 4 and Redmi 4A.

I’d like to dedicate this milestone to each and every one of the Xiaomi India staff, Mi Fans, and all those who trusted us with their hard-earned money. Thank you for putting in the effort to take this company forward. Thank you for doing the impossible.

Until next time,

Manu

【News】Xiaomi unveils Mi MIX 2, a stunning evolution of its full-screen display smartphone

Also announces Mi Note 3 and Mi Notebook Pro

BEIJING, 11 September 2017 — Global technology leader Xiaomi announced Mi MIX 2 today, a gorgeous evolution of Mi MIX, the revolutionary concept phone unveiled a year ago. In addition to raising the bar for its innovative MIX series, Xiaomi also upped the ante in two other product lines — it announced Mi Note 3, which sports a dual-camera setup and a 16-megapixel front camera, and upgraded its line of laptops with the new Mi Notebook Pro.

Lei Jun, founder and CEO of Xiaomi, said: “Mi MIX gave everyone a glimpse of what the phone of the future would look like. We made a concept phone that defied everyone’s expectations about smartphone design, and it has pioneered the trend of full screen display smartphones. With Mi MIX 2, the future is now here. It has evolved from a design and technology test-bed into a user-friendly phone catered to a wider consumer group than ever before, while still evoking the wow factor.”

Mi MIX 2 once again underscores Xiaomi’s commitment to being at the forefront of technological innovation while making these innovations affordable to the widest possible range of consumers. Starting from RMB 3299, Mi MIX 2 will be available in China from 15 September onwards and will make its way to selected global markets at a later date.

Full screen display 2.0

Introduced as a concept device last October, Mi MIX delivered an unprecedented screen-to-body ratio that heralded a turning point in the design of smartphones. Mi MIX redefined the smartphone user experience as the first Android-based device with a 17:9 aspect ratio high-definition screen and rounded display corners, which helped pave the way for Google’s Android CDD (Compatibility Definition Document) eventually allowing screen aspect ratios beyond 16:9, as well as rounded display corners.

Mi MIX 2 builds on the foundation of the original concept. It is now 11.9% smaller than Mi MIX, and has a 5.99-inch screen with a 18:9 full screen display, which delivers a stunning appearance with the screen almost entirely filling up the front surface.

Instead of the piezoelectric speaker solution in Mi MIX, the second-generation uses a hidden speaker that only takes up a thin sliver of space between the top edge of the phone and the screen. At the same time, the front camera remains at the chin and Mi MIX 2 continues using the ultrasonic proximity sensor. This allows the device itself with all the components to fade into the background, while the focus is entirely on the screen.

Pushing the boundaries of smartphone design with ceramic

Jointly designed with world-renowned designer Philippe Starck, Mi MIX 2 represents Xiaomi’s efforts in pushing ahead with the use of ceramic. It has a beautiful ceramic back, which features a four-sided curved design that transitions smoothly into the aluminum frame.

Also announced today was Mi MIX 2 Special Edition, which has a ceramic unibody — a first for any smartphone. Looking incredibly premium with the glossy jade-like finish, the ceramic unibody on Mi MIX 2 Special Edition takes an arduous 7-day process to manufacture, as even polishing the surface requires the use of diamond powder because ceramic is incredibly hard.

A truly global smartphone

With 43 network bands in total, Mi MIX 2 is a truly global smartphone that can be used almost anywhere in the world, perfect for travelers who may frequent places with different networks, such as the U.S.

Mi MIX 2 delivers the ultimate high-performance experience, powered by a Qualcomm Snapdragon 835 processor and up to 8GB RAM. It also uses the latest Sony IMX386 sensor in its 12-megapixel camera, and comes with 4-axis OIS that reduces the effect of handshake or motion, so images and videos remain sharp.

Mi MIX 2 will be available in 6GB + 64GB, 6GB + 128GB and 6GB + 256GB versions, priced at RMB 3299/3599/3999 respectively. Mi MIX 2 Special Edition, which comes with a ceramic unibody in either white or black, comes with 8GB RAM and 128GB storage for RMB 4699.

Mi Note 3: Xiaomi’s best camera smartphone yet

With a dual-camera setup and a 16-megapixel front camera, Mi Note 3 is a larger version of Xiaomi’s popular flagship Mi 6 launched earlier this year. It has a 5.5-inch display and a larger 3500mAh battery.

The dual camera setup with wide angle and telephoto lenses gives users the ability to shoot beautiful portraits with out-of-focus backgrounds. The front camera captures light better with less image noise thanks to large 2μm pixels, achieved by combining multiple pixels on the image sensor into one. The Beautify feature gets an upgrade in Mi Note 3 with an AI algorithm for more natural selfies. Mi Note 3 also has a new unlocking method through AI-based facial recognition, so unlocking the phone is just like taking a selfie.

Mi Note 3 will be available in China starting 12 September priced from RMB 2499 onwards.

Mi Notebook Pro: High-performance professional laptop

Xiaomi also announced today a new high-performance professional laptop Mi Notebook Pro, equipped with the latest eighth-generation Intel Core i7 quad-core processor and NVIDIA GeForce MX150 graphics, which delivers a smooth gaming experience with stunning visuals. Mi Notebook Pro has a total of three configurations: i7 + 16 GB + 256GB, i7 + 8 GB + 256GB and i5 + 8 GB + 256GB, respectively, priced at RMB 6999/6399/5599.

The 15.6-inch Mi Notebook Pro comes with a full-HD screen protected by Corning Gorilla Glass, and a fingerprint sensor integrated into the touchpad for easy unlocking of the laptop. Coupled with a 256GB PCIe NVMe solid-state drive (SSD), Mi Notebook Pro powers through demanding tasks effortlessly. On top of that, Mi Notebook Pro has one free SATA SSD slot that gives users an option to expand its storage. It runs on the Chinese version of the Windows 10 operating system and users get full licensed copies of Microsoft Office and Kingsoft’s WPS Office.

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