Can Xiaomi’s Metal Mi 4 ‘Steel’ Apple’s High-End Market Share?

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WANG ZHAO/AFP/Getty Images

WANG ZHAO/AFP/Getty Images

Chinese smartphone maker Xiaomi has long drawn comparisons to Apple (NASDAQ:AAPL) due to its similarly loyal user base, its much-hyped media events, and its charismatic founder. However, while Apple is focused on customers at the high-end of the smartphone market with its relatively expensive iPhones, Xiaomi concentrates on wooing buyers with its low-cost devices that still manage to offer plenty of high technical specifications. Unlike Apple, which maintains its own brick-and-mortar stores and runs slick advertising campaigns, Xiaomi only sells its devices online and uses social media in lieu of traditional marketing.

Xiaomi’s unique approach to the smartphone market has made it a highly popular brand in China, where it surpassed Apple in the March quarter with a 10 percent share of the smartphone market, according to data from market research firm Canalys. “Helped by its Redmi range, Xiaomi became a top three vendor in China for the first time during the quarter, when just a year ago it was a niche player,” observed Canalys research analyst Jingwen Wang. “This domestic success has helped Xiaomi to become the sixth largest global smartphone vendor, despite 97 percent of its shipments being in mainland China, helped by its competitive hardware and innovative marketing strategy.”

Although Xiaomi has surpassed Apple in the Chinese smartphone market, Apple remains the world’s second largest smartphone vendor behind Samsung (SSNLF.PK) with a 15.5 percent share in the March quarter, according to data from IDC. Apple’s iPhone also appears to be securely entrenched in the high-end segment of China’s smartphone market. According to a report from Chinese mobile app analytics platform Umeng via freelance analyst Benedict Evans, Apple’s iPhone accounted for approximately 80 percent of the $500-plus smartphone market segment in China at the end of 2013. So Apple shouldn’t be worried about Xiaomi, right? Well, not quite.

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