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Xiaomi Plans To Reach 20 Million Premium Customers By Placing A Large Bet On Its Upcoming Electric Car

Xiaomi Plans To Reach 20 Million Premium Customers By Placing A Large Bet On Its Upcoming Electric Car
In a highly competitive market, Chinese smartphone manufacturer Xiaomi thinks it has found a consumer niche that would pay for its planned electric vehicle.

Weibing Lu, the president of Xiaomi Group, stated, "We think it's a good starting point for us in the premium segment because we already have 20 million premium users in China based on the smartphone," prior to the car's worldwide unveiling at the Mobile World Congress in Barcelona, which begins on Monday.
“I think the initial purchases will be very overlapped with the smartphone users.”
He stated that for a car it is investing $10 billion to produce, the business took into account a range of price points, from entry level to luxury.
Xiaomi unveiled the SU7 electric vehicle in China around the end of December, but it hasn't given a price yet. Lu promised an official release "very soon" and stated the second quarter will see the beginning of domestic deliveries.
According to Canalys, the Beijing-based company leads the smartphone market and is ranked third globally in shipments, behind Apple and Samsung. According to data from a tech market research company, in 2023 Xiaomi shipped 146.4 million phones worldwide, accounting for around 13% of the total market.
The brand has expanded into TVs and household appliances in recent years; these products are controlled by smartphones and frequently have a sleek, white style. Just under 30% of Xiaomi's revenue comes from appliances and other consumer goods, with phones accounting for the majority of its sales.
Xiaomi is typically recognised for its more reasonably priced goods. This has made others wonder if it will be able to sell an electric vehicle that is positioned as a Porsche competitor in a market where even well-known EV heavyweights like BYD are lowering prices.
According to Lu, Xiaomi bases its strategy on the growth of ecosystems in addition to a smartphone "premiumization" strategy that was introduced in 2020 and has subsequently "achieved very good progress."
Using the iPhone 15 Pro as a benchmark, the business stated in an earnings call in November that the Xiaomi 14 phone was "overtaking" Apple's, as reported in a FactSet transcript.
But Huawei, whose well-liked Mate60 Pro starts at 6,499 yuan ($900), in the middle of the Xiaomi 14 Pro and iPhone 15 Pro pricing range, is also biting into Apple's market share.
According to Canalys, Huawei outpaced Xiaomi in the fourth quarter of 2018 with a 47% year-over-year increase in smartphone shipments on the Chinese mainland.
Building on its technological prowess as a smartphone and telecommunications business, Huawei has quickly established itself as a player in China's electric vehicle industry.
The business distributes its HarmonyOS operating system and other software to several automakers, and it introduced the Aito car brand in late 2021. Huawei uses its smartphone stores to showcase some of those vehicles, such as the high-end Aito M9 SUV, in order to market them.
Despite rumours that it has been developing an electric vehicle, Apple has not yet made a formal debut in the market. Chinese firm Nio debuted its own Android smartphone this autumn.
HyperOS is a new operating system that Xiaomi released in the autumn.
According to the claim, the system has an artificial intelligence component that can learn from user behaviour and modify linked devices, including home lighting, automatically.
“In the future, we think it’s not [that] we give the instruction to the device but actually [that] the device can understand your needs and meet your needs proactively,” Lu said.
The business refers to this approach as "human x car x home."
For now, HyperOS is limited to the Xiaomi 14 phone. However, Lu stated that the system will be available for appliances and the upcoming car in the upcoming months.
Xiaomi is making significant investments in the car and ecosystem as part of its strategy to thrive in a market it anticipates will grow even more competitive.
According to Lu, the market for electric vehicles in ten or twenty years would probably resemble that of smartphones today, with the top five firms controlling roughly 70% of the market. "We don't think we can be the final players without enormous funds."
Lu stated that Xiaomi's next move will be to construct its own factories and produce the essential parts internally after producing the first automobile.
Earlier this month, Xiaomi declared the opening of its new smartphone factory in Beijing, which can produce over 10 million units annually.
According to Chinese government disclosures, the manufacturer of the SU7 automobile is currently identified as a subsidiary of the state-owned Baic Group. Xiaomi stated that at this time, it had no public information to give.
Like a growing number of Chinese businesses, Xiaomi is searching outside for potential expansion. Between 40% and 50% of the company's revenue during the previous six years has come from sources other than China's mainland, mostly from Europe and India.
As president of the company's international business division, Lu joined Xiaomi Group in 2019 and stated he spends "a lot of time" in foreign markets.
He stated, "It will be the amplifier of Xiaomi's business," pointing out that the global market for consumer electronics is around three times larger than China's.
Lu stated that he is travelling to Paris as well as Africa and the Middle East as part of his MWC trip to Barcelona.
Although he agreed that Xiaomi faces greater problems in expanding internationally due to the political climate, he claimed the company can overcome these obstacles by strengthening its internal capabilities and diversifying its revenue streams both internationally and by product.
Regarding the car, Lu stated that it usually takes two to three years for it to be launched internationally, but she would not provide a specific date.

Christopher J. Mitchell

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