Xiaomi testing phones in the U.S. ahead of potential launch

Xiaomi's Mi 5. Image: Xiaomi

Xiaomi may be preparing to elbow its way into the U.S. smartphone market. Finally.

The Chinese smartphone gear vendor produced a special version of its Mi 5 handset earlier this year for testing on U.S. networks, Global Vice President Hugo Barra told Engadget, and it has developed a version of its Mi Note 2 for field testing. “That’s again just another small step in the right direction or in the direction of being able to launch full-on products (in the U.S.),” he said.

Xiaomi enjoyed a meteoric rise in 2013 thanks to the exploding smartphone market in its domestic Chinese market, and it saw a funding round that valued the company at $45 billion. The 70 million smartphones it sold last year were well short of the 100 million founder Lei Jun once predicted, but it was the fifth-largest smartphone manufacturer in the fourth quarter of 2015, according to Gartner, claiming 4.5 percent of the worldwide market. It was also the top-selling smartphone vendor in China last year, The Wall Street Journal recently reported.

Smartphone sales in China are slowing, however, as the country evolves from an emerging mobile market to a mature one. Xiaomi has long expressed an interest in expanding to the U.S., but has yet to enter the market. A little-known MVNO earlier this month began offering Xiaomi smartphones, but those devices were quickly pulled back after the manufacturer said it hadn't authorized those sales.

Some analysts believe that Xiaomi is hindered by a lack of patents and that any entry to the U.S. would swiftly be met with lawsuits from Apple, Samsung and other heavyweights. The company appears to be working to address that problem and earlier this year acquired 15 issued patents and four patent applications from Broadcom.

Xiaomi would clearly face some major challenges in a competitive U.S. smartphone market where growth has slowed to a crawl, but the company would have a few factors in its favor. It not only has significant scale and expertise, its mid-range devices might appeal to users who have become less interested in spending top dollar for high-end devices with only incremental improvements. And Samsung’s disastrous Galaxy Note 7 endeavor could give Xiaomi an added boost.

For Xiaomi to succeed in the U.S., it will need the strong carrier relationships that are crucial for smartphone branding and distribution. If it can forge those relationships as it tests its devices and prepares to bring them to market, it could steal customers from manufacturers of other mid-range phones.