Xiaomi to focus on high end of the Chinese market

After building an impressive share of the worldwide smartphone market with low-end and mid-range smartphones, Xiaomi is hoping to carve out some space in the high end of the market in China.

The South China Morning Post reported that Xiaomi aims to become a premium brand, targeting Chinese users looking to upgrade their handsets. The vendor last year opened an "experience center" in Hong Kong to enable would-be customers to get their hands on its devices, and it plans to open roughly 1,000 more retail outlets worldwide.

Xiaomi was the world's fifth-largest smartphone vendor in the fourth quarter of 2015, according to IDC, but it slipped out of the top five in the first quarter of 2016 as fellow Chinese vendors Oppo and Vivo made huge strides. The company enjoyed a meteoric rise in 2013 but last year sold "over 70 million" phones in 2015, falling well short of the 100 million founder Lei Jun had predicted.

The pivot follows the sudden deceleration of a once-booming Chinese smartphone market that has become saturated. Smartphone shipments enjoyed 62.5 percent year-over-year growth in 2013, but the figure had dropped to 2.5 percent last year. The average selling price of smartphones in China rose from $207 to $257 during that time, IDC said.

Xiaomi has no carrier relationships in the U.S., and earlier this year it nixed an effort from a minor U.S. MVNO to sell three of its smartphones online. The vendor continues to pursue the phablet market and is preparing to launch the Mi Max, which sports a 6.44-inch screen and a price tag of $232.

The company also appears to be increasing its focus on software and services as it targets high-end users. Xiaomi said in June that will buy roughly 1,500 patents from Microsoft in a deal that will see the Chinese manufacturer install copies of software such as Office and Skype on its phones and tablets.

Xiaomi has maintained that its phones will eventually be available to U.S. users. If the company can make some headway with high-end phones in its native market, it may have increased leverage to take on Apple and Samsung in the U.S. eventually.

For more:
- see this South China Morning Post story
- read this Cnet report

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