Xiaomi launches first smartphone made in India!
Xiaomi launched it's first made-in-India smartphone named Redmi 2 Prime at a price of Rs.6999. In the partnership with Foxconn, Xiaomi announced its first manufacturing unit in India at Sri-city, Andhra-Pradesh. Redmi 2 Prime is the first smartphone to be assimilated under Xiaomi's facility at Sri city. Both Xiaomi and Foxconn declined to unveil the size of investment in setting up the assembly line.
The company was founded in 2010 by 8 partners in China, backed by some institutional investors, including Qualcomm. The word 'Xiaomi' means 'millet'.
Xiaomi disclosed plans to enter 10 countries, including India, Russia, Brazil and Vietnam by the end of 2014. It was seen as giving tough competition to Apple as Xiaomi's China sales during 2013's last quarter outnumbered Apple's. The company had set up a target of 100 million sales from 2015. General opinion indicated that shrinking sales in China was forcing Xiaomi to expand internationally.
Xiaomi became the world's fourth largest smartphone maker within first three years of operations. Xiaomi's valuation, among android smartphone makers, was second only to Samsung, whose valuation ($183.5 billion) was over 4 times Xiaomi's. Samsung had got caught between Apple's high-end and Xiaomi's low-end offerings. With Samsung's profits shrinking every passing year, Xiaomi could catch up sooner than expected.
At $45 billion, Xiaomi's worth was more than Twitter and Uber. The low prices were a result of minimal margins – 3%. Online-only selling model in India and China has added to its affordability. People in US and UK bought contract based phones to get high end phones at low cost; this could keep Xiaomi out of these markets for some time.
While most companies sell a model for 6 months, Xiaomi sells a model for 18 months to earn profits from the falling component costs over the period of time!
The investment amount was undisclosed; the company's value was pegged at $45 billion. Xiaomi had recently raised $1.1 billion from All Stars Investment, GIC, DST and others. The announcement came a week after the launch of Mi 4i, Xiaomi's 'Made for India' handset. Xiaomi planned to set up a R&D team and data centre in India as a part of its expansion plan.
The company's Vice President, Hugo Barra was Google Android's product spokesman and Vice President before joining Xiaomi. A Brazilian national, Barra is Xiaomi's first major non-Chinese hiring.
Xiaomi announced that it is teaming with Taiwan-based manufacturer Foxconn to start assembling mobile handsets in India. Foxconn's manufacturing presence would help Xiaomi gain a strong position by allowing it to handle inventory easily and cut-down shipping lead times. "Manufacturing smartphones locally is a significant step towards incorporating Xiaomi into the fabric of India in the years to come," stated Hugo Barra.
Xiaomi has a similar manufacturing facility in partnership with Foxconn in Brazil apart from China and India. Barra stated, "The unit in Brazil and the one here are exactly the same. It took us about three times more the time to start manufacturing in Brazil than in India,"