Why Xiaomi Is the World's Second-Largest Phone Company

Affordability makes people take notice

Key Takeaways

  • Xiaomi pushed out Apple from the second spot among smartphone vendors, based on sales and market share.
  • The brand is especially popular in China and India.
  • Xiaomi entered the market with affordable smartphones, but is focused on adding higher-end models.
A Xiaomi smartphone on display at a Xiaomi store in El Salvador.

APHOTOGRAFIA / Getty Images

Apple recently lost its spot as the second-largest smartphone vendor to a company that many Americans may not be familiar with, shining a light on the growing popularity of affordable phones from up-and-coming brands around the world.

Beijing, China-based Xiaomi snagged the No. 2 spot for smartphones after South Korea’s Samsung for the first time ever, according to a study of second-quarter data by independent analyst company Canalys. The rankings are based on each company’s market share for shipments.

Xiaomi has proven to be popular for its affordable devices, but is now branching out and looking to grow its higher-end devices, too, Ben Stanton, research manager at Canalys, told Lifewire in an email. The research firm calculates that the average selling price of Xiaomi phones is about 40% cheaper than Samsung phones, and 75% less than Apple.

"Xiaomi devices are rooted in value-for-money," Stanton said. "The early progress of the brand was rooted in an incredibly lean operational structure, with very targeted marketing spend, that allowed its devices to undercut competitors. However, it has since grown far beyond this initial focus."

Xiaomi Has a Lot of Phone Options

Xiaomi is known for constantly innovating its phones, which fall into three major brands: the flagship Mi Phones, Redmi, and the Pocophone. 

The phones range from affordable to higher-end, depending on the specific model. For example, the Redmi 9A goes for around $100 or less, while the Mi 11 Ultra launched in Europe with a price equivalent to about $1,400

"So, a major priority for Xiaomi this year is to grow sales of its high-end devices, such as the Mi 11 Ultra," Canalys said in its smartphone sales report. "But it will be a tough battle, with Oppo and Vivo sharing the same objective, and both willing to spend big on above-the-line marketing to build their brands in a way that Xiaomi is not."

Growing Internationally 

If you haven’t used a Xiaomi phone, you might start seeing more of the brand in the future as it expands to international markets. The brand has been expanding its reach in different countries just as much as its product lines. 

Shipments of Xiaomi phones grew rapidly in the second quarter. According to Canalys, its shipments were up more than 300% in Latin America, 150% in Africa, and 50% in Western Europe. 

Part of its success is due to the brand-building networks of loyal customers. 

"Xiaomi devices are rooted in value-for-money."

"One major effort which has resonated in international markets is to create a cult status among young demographics, curating communities of 'Mi Fans' to endorse its products," Stanton said. “Outside of China, it has been particularly successful in India, where it has been the leading brand for some time.”

However, Xiaomi isn’t the only brand outside of Apple and Samsung fighting for market share. Two other top Chinese brands include Oppo and Vivo. Canalys estimates that each have about 10% of the market share worldwide after Apple and are growing in the double digits.

Why Xiaomi Hasn’t Taken Off in the US

Despite its popularity in many corners of the world, Xiaomi has yet to become a household name in the US

The brand’s parent company was blacklisted by the Department of Defense (DoD) in January after it was accused it of being linked to China’s military, NBC reported. However, the US government reversed that ban in May.

Xiaomi’s friction with the US government seems to have been resolved, Stanton said. However, it still isn’t a leading brand there, for now—which is also due to other factors.

Someone standing on a terrace holding a smartphone and a coffee cup.

martin-dm / Getty Images

"It is not yet an active player in the US smartphone market, but that is mainly because the US has high barriers to entry for any new brand," Stanton said. "As most customers buy their device via the network carrier, these carriers have immense power to dictate the brands that actually get ranged and are therefore successful." 

So, will US smartphone users see more phones from brands like Xiaomi, Oppo, and Vivo available in electronics stores? Despite the challenges, it could still be possible. 

"The younger Chinese brands have struggled to negotiate agreements with the US carriers, but it is not impossible, as some of the more established vendors like Lenovo (Motorola) and ZTE have proved," Stanton said.

Either way, the latest sales figures remind us that there’s a whole world of smartphones out there beyond just what Samsung and Apple are offering.

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