Caixin
Oct 26, 2016 06:35 PM
BUSINESS & TECH

Xiaomi Unveils New Smartphones as Apple and Samsung Falter

Lei Jun (R), founder and chief executive of Xiaomi Corp., and Hong Kong actor Tony Leung Chiu-wai, pose for pictures at a launch event for the new smartphones Mi Note 2 and Mi MIX in Beijing on Oct. 25. Photo: Visual Chin
Lei Jun (R), founder and chief executive of Xiaomi Corp., and Hong Kong actor Tony Leung Chiu-wai, pose for pictures at a launch event for the new smartphones Mi Note 2 and Mi MIX in Beijing on Oct. 25. Photo: Visual Chin

(Beijing) —Xiaomi Corp. has unveiled its futuristic ceramic Mi MIX "phablet," a move seen by industry-watchers as strategically important to the brand's future, as the Chinese company simultaneously launched its flagship Mi Note 2.

Xiaomi rolled out the two new smartphones in a bid to regain its former spot as China's top-selling phone maker, as Apple reported a drop in iPhone sales and Samsung remained mired in controversy over the exploding batteries in its now-defunct Galaxy Note 7.

Xiaomi launched the flagship Mi Note 2 and the more-expensive Mi MIX concept phone during a news conference in Beijing on Tuesday. Both phones will go on sale in November.

The Mi Note 2 will start at 2,799 yuan ($413), and the Mi MIX — with a screen larger than a conventional cellphone's but smaller than a tablet's — will cost at least 3,499 yuan, making it the most expensive phone Xiaomi has ever produced.

Once the country's largest smartphone maker, Xiaomi has been dethroned by domestic rivals as interest waned in its high-priced handsets. Oppo Electronics Corp. became the country's top-selling smartphone maker with a 16.6% market share in the third quarter, followed by Vivo Smartphone and Huawei Technologies Co. Ltd., according to technology research firm Counterpoint Technology Market Research.

Xiaomi currently ranks fourth in China with a 10.6% share of the domestic market. But the company could be well-placed to stage a comeback as Apple reported that revenues from iPhone sales dropped almost 30% in the latest fiscal quarter in the country and as Samsung continues to be hit by fallout from reports of Galaxy Note 7 phones catching fire. Samsung discontinued the model earlier this month.

Much of Xiaomi's hopes are pinned on the sleek, ceramic Mi MIX, which company founder and CEO Lei Jun said during the launch offered "a glimpse of what the phone of the future will look like."

The 6.4-inch phone, designed by prominent French designer Philippe Starck, has a screen that takes up 91.3% of the phone's surface, maximizing the handset's viewing area.

To maximize the screen-to-body ratio, the Mi MIX replaces the earpiece speaker with a piezoelectric ceramic unit that can covert electrical signals into mechanical energy. The camera has also been moved to the lower right corner of the phone.

The manufacturing cost of the phone is too high for mass production, Xiaomi said.

Due to limited availability, James Yan, director of Counterpoint, said the MIX phone was strategically more important to Xiaomi's brand than to the smartphone maker's sales.

Wang Yahui, secretary general of Mobile China Alliance, said that it may take Xiaomi customers, who were previously drawn to the brand by its low-cost phones, some time to accept new product lines with a much higher price. "But to survive in China's smartphone market, Xiaomi has to enter the high-end market," Wang said.

Xiaomi also unveiled the Note 2 and the virtual-reality headset Mi VR. The Mi Note 2, with a 5.7-inch curved screen, resembles the troubled Samsung Galaxy Note 7, and could neatly fill the gap in the market created by the departure of the South Korean company's phone, Wang said.

Contact reporter Chen Na (nachen@caixin.com); editor Calum Gordon (calum@caixin.com)

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