Xiaomi suits up for a debut on Apple's home turf

A visitor uses his mobile phone in front of a logo of Xiaomi during the Appliance & Electronics World Expo 2016 (AWE 2016) in Shanghai, March 11, 2016. [Photo/IC]

Xiaomi Corp is preparing to enter the US smartphone market "in the near future", employing the same online sales and social media marketing tactics that helped the six-year-old startup become China's largest privately funded technology startup.

Xiaomi can no longer afford to ignore the world's largest smartphone arena by revenue, company Vice-President Hugo Barra said in an interview. Its international expansion is taking on newfound urgency as growth at home slows and rivals such as Huawei Technologies Co erode its market share.

"The US is a market that we definitely have in our sights," Barra said on Bloomberg Television.

"We will lead with social media, with the channels that allow us to get in touch with the young generation that are enthusiastic about new technology. We are definitely going there."

Barra, who oversees the Chinese company's international expansion, has signaled Xiaomi's US debut before. But the smartphone vendor is now in a better position to launch an incursion onto Apple Inc's turf.

In June, the Beijing-based company announced the acquisition of nearly 1,500 technology patents from Microsoft Corp - a deal that may smooth potential legal tangles over intellectual property as it pushes abroad.

Xiaomi, whose plethora of products include smart bikes and rice-cookers, has no timetable for a US launch, Barra said. It already sells products such as earbuds and fitness bands to Americans online, its preferred sales method.

"The US is a very important market for any consumer electronics and lifestyle brand, certainly for us as well. Obviously we've got to time things carefully."

But Xiaomi may have trouble breaking into a market dominated by Apple and Samsung Electronics Co. Smartphone sales are also largely controlled by telecommunications carriers such as Verizon Wireless and AT&T Inc, a channel with which Xiaomi has limited experience.

Rivals such as Huawei and ZTE Corp are also increasingly targeting American consumers.

"The technology bar in the US is much higher than in Xiaomi's current major markets, which means it takes a lot more to get into that market," said Nicole Peng, China research director of Canalys, a consultancy. It will also have to consider the economics of such a move.

Bloomberg