Challenger approaching: Xiaomi may enter the U.S. smartphone market by the end of the year
While Apple and Samsung continue to dominate the largest Western market, Chinese OEMs have struggled to gain a meaningful foothold. Xiaomi is a prime example of this dichotomy: while the OEM may now be the fourth largest smartphone manufacturer in the world, it is still relatively unknown in the United States. The company is looking to change that in the near future as it plans to enter the U.S. market.
Recently, Xiaomi’s chairman Lei Jun said that the company “[plans] to start entering the [U.S.] market by end 2018 (sic), or by early 2019.” Xiaomi already has a small presence in the States, but not in the phone arena. Rather, the company has been selling other electronics (like headphones, mirrorless cameras, and even robot coding kits) over the past year to moderate success.
If the OEM is able to successfully launch its smartphone brand stateside, it may cause a major shakeup in the American mobile phone arena. Chinese smartphones have become known as solid “bang-for-your-buck” devices but are typically only imported by Android enthusiasts. The larger consumer base as a whole is more reliant on big-box retailers (think Best Buy) and their phone carrier for device support. To that end, Xiaomi’s best bet would be to launch phones in partnership with one of the Big Four carriers: Verizon, AT&T, Sprint, and T-Mobile. This might drive up prices as carriers will look to take a cut of profits for themselves. Should this happen, the Chinese smartphones may lose their competitive advantage and fall on deaf ears.
There are other hurdles to entering the American market. Huawei’s potential deal with AT&T was killed earlier this year by national security concerns. While the validity of these concerns is debatable, the issue itself was enough to block the largest Chinese OEM from entering the U.S. Xiaomi has an uphill battle ahead of it.