Hi, this is Wayne again with a topic “Is Xiaomi the Next Samsung?”.
Shami is a consumer electronics firm with their headquarters in beijing and founded in 2010. Now the most impressive thing here is that you’ve almost definitely heard of them. So the question is: is Samsung a South Korean firm founded all the way back in 1938, losing its lead? A little bit I mean: how is it possible that such a recent company is proving such a threat anyway? As always, the answer is not exactly black-and-white, but let’s delve a little deeper whilst they both do quite a lot more than this, a good place to start would be the smartphone sales figures because for both companies, much of the profits come from there. So in 2014, Samsung shifted just under 320 million units and if you compare that to what Xiaomi did, that was just under 60 million moving over to 2015, you can start to see the balance is shifting a little bit, though Xiaomi sales skyrocketed in 2015. They sold over 70 million units so moving in from 57 point 7 million.
That’S a huge jump. Over van Samsung actually only grew by about 2 percent. They went from just under 320 million to just over it. Not only this but bear in mind that in 2012 Xiaomi sold about 8 million units and in 2013 this was about 18 million.
So if you look at the growth figures there they’re almost astronomical. Having said that, that’s not exactly the full story. A lot of people might see those figures start jumping up and down and claiming that Xiaomi is on their way to the top. But actually, if we look at 2016, even with the crazy spectacle that was a Galaxy Note, 7, the huge mess up, something as she only lost a 5 percent year-on-year.
Having said that, Xiaomi ad she refused to disclose their sales, and the simple fact is is that the smartphone market is stagnating, so in India, for example, that was one of the big buyers of Xiaomi smartphones, because the purchases went straight through the roof. Xiaomi was really strongly affected by that. Having said that, the fact that Samsung was able to maintain its strength of sales in such a difficult time really shows that the company has a little bit more behind it than Jeremy does now, while sales figures are far from everything, they’re definitely gon na give you An idea of where the two companies stand, while sea armies growth in the past at least husband’s staggering, crazy growth, it’s clearly not on the same level of Samsung in terms of it’s just sheer size. Having said that, one of the reasons I actually made this video was that, in terms of what it’s trying to do, Xiaomi is becoming a little bit more like Samsung.
So you may be aware that earlier this year, Xiaomi announced it was going to start producing its own system-on-a-chip, namely the Serge s1. Now this is not a common thing to do. As you might be aware, the only other companies that do this are Apple Samsung and Huawei. There’S the only three companies that actually manufacture their own chips for their own smartphones, because it’s such a costly thing to do and, to be honest, the only thing it shows about what way the father they’re moving in this direction is that they have ambition.
They know that they want to operate on such a large scale, that it makes sense for them to produce their own chips and achieve these economies of scale. Unfortunately, after the company did make these serge s1, which you may have seen in the xiaomi knee 5c, the company’s gone, pretty quiet about their operations, they haven’t announced any new chips and, to be honest, I’m not sure it’s been a complete success. It was a mid-range chip, but it had a pretty decent GPU for gaming, but the reception was pretty mixed, okay, but perhaps more important than anything else. All the Xiaomi phones as good as the Samsung phones, and, to be honest, long story short. I would say yes now, since they launched the me Wan back in 2011. I believe the company has come such a long way, whilst the phones have always had flagship specifications. They’Ve always been right at the top of their game. In terms of that, we’ve seen a bit of a shift. We’Ve seen a shift from imitation from matching the competitors and reducing the price to innovation from being at the company that other people want to match. For example, taking a look at the most recent Xiaomi me6, it has one of the best dual cameras, which is a new tech in itself on the entire market.
It has one of the very best and brightest 600 nits display and they’ve also got a version with 18 karat gold on the camera own. Also, the phone is literally half the price of the new Samsung Galaxy. Note 8, for example, but actually, whilst the Xiaomi me 6 was a great phone, I’m gon na say it wasn’t the turning point for the company so late last year, Xiaomi announced an event and, to be honest, without really much teasing at all, they changed the entire Game when the company announced the mean mix smartphone, they created a new set of smartphones, a new category entirely, and that is something that norm was really expecting them to do. And since then, we’ve seen imitators of them.
We’Ve seen many people trying to copy what they’ve done to not much success so that in itself marks exactly the change I was talking about. This whole moved to evasion to being at the absolute forefront of the industry. I think is very telling and to be honest when you’re using the Xiaomi me6, it feels every bit as good as the very best Samsung phones. It is cheaper and if anything, it is even more cutting edge. The other difference between Samsung and Xiaomi is really where they operate, while Samsung, clearly being established so long ago, has had a lot of time to establish itself in western regions. Charlie right now is still mostly operating in its own territories. Having said that, this could be very well about to change so Hugo Barra, the VP of Xiaomi, recently noted that the company is actually testing us bands, so they are now looking to build smartphones built from the ground up to work in western territories, and this is Incredibly, exciting because the entire company’s philosophy is about creating products creating hardware and software together that is basically being sold at just above cost pricing. Well, that is going to do to the entire smartphone market is potentially turn it upside down either.
Other competitors are gon na. Have to match them or they’re gon na go out of business. Even so, even as competition is heating up in the smartphone market, even as the companies overlap in terms of the territories they’re serving, they will remain fundamentally different firms. For example, Samsung has a much broader range of products than Xiaomi ever even wants to Samsung will do everything from your fridges to your air conditioners to your appliances. Xiaomi has no intentions at all. Xiaomi has said that for the foreseeable future they want to be well away from that they want to stay in the realm of IOT, the Internet of Things where, basically, all these devices are connected and always communicating with each other.
So I really hope that makes things a little bit clearer for you guys. Whilst both of these companies are serving this overlapping niche of smartphones, they are at their very core, very different firms which have different goals, different ambitions. Having said that, within the smartphone market, something is clearly the more dominant of the two, as we saw, Xiaomi was very heavily affected by this sort of downwards decline in smartphone demand.
Where is Samsung due to a lot of marketing due to a lot of innovation and lots of other different factors managed to keep its sales fairly steady, even amid that disaster. That was the note 7. But when we look at Jamie’s product side by side with Samsung’s, they are as good and if they can afford to do that, whilst accepting a lower profit margin, then competition is definitely going to ha thanks a lot watching guys. I need to use a boss and I’ll see you guys next time.
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