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Xiaomi is overtaking Samsung at full speed.
At the end of last year, Xiaomi did what no other manufacturer has managed to do in countries like India for the past six years: surpass Samsung to become the first smart phone company in the country. It was a fantastic occasion for the Chinese manufacturer, especially since Xiaomi started selling phones only three years ago.
Xiaomi started slowly in India, and the company’s luck worsened in 2016, as it lost ground to offline sellers such as OPPO and Vivo. He undertook a correction of the course at the beginning of last year, where he began to emulate Samsung’s business model and, in doing so, managed to rapidly increase its numbers. This is how Xiaomi became the largest smartphone brand in India.
Ruling the phone segment: Xiaomi REDMI Note 5 Pro
At any time, Samsung has more than ten models for sale in the budget segment. The company’s ability to flood the market with devices with not many variations between models allowed it to reach tens of millions of sales, and this is the route Xiaomi takes now.
During the last six months, we have seen the launch of the Mi A1 based on Android One, the REDMi Y1 and the Y1 Lite, the REDMi 5A entry level phone, the REDMI Note 5 and the REDMI Note 5 Pro, a great variety compared to the ones you find certain western markets such as Spain where we are still with the Redmi 4 versions.
It does not look like Xiaomi is going to lift her foot off the gas at any time, since we’re going to see the new REDMi 5 later this month. Next up is the Mi Mix 2S, which is scheduled for a world debut on March 27. The phone is likely to go to India, as Xiaomi strengthens its efforts in the premium segment in that country.
Xiaomi is flooding the market with phones and the movement is paying dividends.
With respect to the Redmi Note 5, the device is identical to its predecessor in terms of internal hardware, with the main change is the front panel 18: 9 format. The iterative model was used by Samsung with great effect over the past four years, giving rise to a wave of models in the Galaxy J series that had little in the way of differentiating themselves from their predecessors.
However, Samsung managed to sell tens of millions of Galaxy J phones – for years, the Galaxy J series was Samsung’s best-selling range in many markets. Xiaomi takes a similar approach, but with a key difference: REDMI Note phones are highly desirable and do not combine the parts of the leftover container.
The Redmi Note 4, for example, led the field last year in terms of value for money, and by setting Redmi Note 5 prices at a lower scale, Xiaomi is ensuring that there is a similar option available for those looking to collect a phone without spending a lot of money.
Meanwhile, Samsung also adheres to its iterative model with its budget portfolio. The On7 Prime is the challenger of the Xiaomi Redmi Note 5. Although Samsung launched the phone two months ago, the specifications practically did not change from 2016, when the device was called Galaxy J7 Prime. Samsung also launched a variant only online of the same device called Galaxy On NXT.
The On7 Prime comes with a 5.5-inch Full HD panel, Exynos 7870 chips with eight Cortex A53 cores at 1.6GHz, a 13MP rear camera, 64GB of internal storage and a 3300mAh battery. News for 2018 is the 13 MP front camera, 4 GB of RAM and a Samsung Mall feature that collects listings from various e-commerce stores in one place.
The J7 Prime was not the fastest phone in the low budget segment when it was launched in 2016, and the first On7 inherits all its virtues and its shortcomings. The design is obsolete, the phone lacks basic elements such as the ambient light sensor and the gyro, and the TFT screen is not very attractive.
With the On7 Prime retail at a price more expensive than the Redmi Note 5, it’s easy to see why Samsung is losing ground with Xiaomi in the low budget segment.
Not everything goes smoothly
In spite of everything, Xiaomi is absent in a key space: availability. The brand continues to sell phones through the flash sale model, and most customers who have registered an interest will not be able to access the device.
For example, the first sale of the Xiaomi Redmi Note 5 Pro exceeded 2 million registrations, but only had to sell 300,000 available units. They sold out in a matter of minutes, and subsequent sales have ended similarly. Xiaomi said it will increase availability and make the phone available in offline markets, but it is clear that there is plenty to do in this area.
Having a product desired by millions is something; Making sure that you address these customers is a completely different game, and Xiaomi has to work doubly hard to make sure you can compete at this level.
Another area where Xiaomi has focused in the last two years is local manufacturing. With certain governments focused on imposing taxes on telephones that are imported into the country, now it is about establishing local factories to compete effectively. Xiaomi already has two factories in India, for example, and all their Redmi phones are assembled locally.
The manufacturer is working on a third facility to increase telephone production and has also invested in a stand-alone factory that produces external batteries and powerbanks.
Samsung was the first to seriously consider manufacturing locally, as the brand has delegated the manufacture of telephones to local centers like India’s for a long time. Doing so gives it a distinct advantage when it comes to pricing – the Galaxy S9 + has been released at the same price as last year’s Galaxy S8, less than the starting price of the iPhoneX.
By focusing on local production, Xiaomi is making sure that it maintains this advantage when it comes to setting prices.
Investing in new products
With products like the Xiaomi Mi TV 4, Xiaomi also diversifies its portfolio. Xiaomi fans have been waiting for the TV series to come globally in countries like India for several years, and for good reason. The 55-inch Mi TV 4 with a 4-bit 4K panel and HDR10 has an exceptional price, significantly lower than those of Samsung, Sony and LG. Xiaomi TVs have a better build quality and a recommendation engine that does not have the competition.
Post updated in October 2018 including links.