Today saw Xiaomi enter the UK smartphone and consumer electronics with the launch of the flagship Mi 8 Pro smartphone, a solid portfolio of Android-powered handsets, a new store in London, and an electric scooter. How will Western markets take to the strange mix of Xiaomi’s consumer products, smartphones, and impactful branding?
High Specifications At A Low Price
Let’s face it, the table stakes for a flagship device make for a great phone. The Mi 8 Pro has the requisite SnapDragon 845 system on chip, a dual camera setup (two 12 megapixel cameras), facial recognition for unlocking, a 6.21inch AMOLED display with a notch that looks exactly like that on the iPhone XR, 8 GB of RAM, and 128 GB of internal storage. On top of that the latest talking point is also preset – the in-display fingerprint reader.
The Mi 8 Pro is the latest handset that packs in the features, trims the margins, and looks to the community and the after-sales market for financial success. With prices starting at £499 (matching the similarly specced OnePlus 6T) the Mi 8 Pro is an attractive handset… but it has a transparent secret weapon to bring people into the Xiaomi ecosystem.
Leveraging Xiaomi’s Brand
While the geekerati will get rather excited over the specifications of the Mi 8 Pro, it’s the use of a transparent glass cover at the rear of the Mi 8 Pro that is going to be noticed. While the chips and circuitry on show are “for decorative purposes only” and offer no functionality to the hardware, the look offers something different to the market and an opportunity for Mi 8 Pro fans to show off their handset.
Getting a community on board to promote a brand is not a new endeavour for the smartphone market. OnePlus has been pretty clear from the start that this is part of their playbook, while the rabid support for Apple and the iPhone is a textbook implementation. Part of being in that community is a way to identify fellow users – such as the glowing Apple on the older MacBooks – and while there are no LEDs to throw out some futuristic lights there’s enough visual on the chips, wiring, coils, and battery to create a silicon fascinator.
If you’re on a call, people will see ‘inside’ the phone. If you want to show of your new phone, the chips are going to be highlighted. The Mi 8 Pro could quickly become “the phone you can see inside” in the UK as the Xiaomi community weans itself off grey imports onto the actual UK hardware.
The Strategy Of Many Razors And Many More Blades
Although it is a powerhouse in its home country of China and the massive Indian market (which puts the company in fourth place in the smartphone market), Xiaomi has taken its time to expand in the traditional ‘western’ markets. With a foothold in Spain, France, and Italy, the United Kingdom is arguably the biggest new frontier for the Beijing-based company. From Xiaomi’s blog post:
Xiaomi’s entry into the UK follows its arrival in France and Italy this May, and the official entry last November into Spain, its first Western European market, where it had already become the #3 smartphone vendor as per Canalys. Today Xiaomi has entered 74 markets globally and is top in 30 markets. As per Q2 IDC report, Xiaomi is ranked 4th in the global smartphone market with nearly a 50% year on year growth rate.
Xiaomi is not changing its strategy for this launch. The handsets are a comparable price and while I would expect them to have some margin, there will not be a huge margin on the handsets. The real value will be in the Xiaomi name, the peripherals, and the lifestyle products that are sold alongside the smartphones.
That’s why the key part of the launch today is not necessarily the flagship Mi8 Pro, the mid-range Redmi 6A. It’s the reveal that Xiaomi will be opening a Mi Store in Westfield London. Establish the Xiaomi brands, bring users into the ecosystem, and offer them a wide range of products with varying margins. It’s working in China. It’s working in India.
Now let’s see if it works in the UK.