The smartphone flood no longer works

Xiaomi certainly imagined things differently: In the fourth quarter of 2021, the Chinese manufacturer will be treading water, while Apple and Samsung will be the winners. For Xiaomi, the question arises as to whether the previous strategy still has a future. A commentary by Kaan Gürayer.

Xiaomi fails to increase smartphone market share

The numbers that the market researchers at Canalys have compiled for Xiaomi are oppressive: In the recently completed fourth quarter of 2021, the busy electronics group secured one 12 percent share of global smartphone sales – the same as in the previous year. Gold and silver medals go to Apple and Samsung (source: Canalys)

Notorious optimists, who always see the glass half full, would now object: “Neither improved nor worsened, it fits!” But things are not that simple for Xiaomi. The manufacturer puts new smartphones on the market every week, which are intended to attract customers with an even more aggressive price-performance ratio. In view of this, these numbers are more than just sobering, especially since things are not going well with smartwatches either.

With this “a lot helps a lot” strategy, Xiaomi is reminiscent of Samsung’s former business practices. Up until a few years ago, the South Koreans also flooded the market with countless, almost indistinguishable smartphones.

Model Samsung

the But the industry leader has turned the corner, now relies on “class instead of mass” and has caught up massively, especially in the area of ​​software and ecosystem. Hardly any other manufacturer, apart from Google itself, delivers Android updates so quickly and so long. And the interaction of the different devices – from smartphones and tablets to smartwatches and in-ear headphones – is making enormous progress and is now almost as good as the big Apple model.

Smartphones are just a playing field of Xiaomi:

Transformation to premium manufacturer

The fact that Xiaomi can no longer make up any ground in terms of market share is a first cautious indication that the group will have to make an uncomfortable and painful change in the near future: From cheap home to premium manufacturer. Because one thing is also certain: Xiaomi will probably not be able to survive the undercutting price competition against Realme and Co. in the long term.