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Chinese Smartphone maker Xiaomi has overtaken tech giant Apple in the smartphone market in 2021, while Korean tech company Samsung has retained its top spot. The new data for the second quarter show an overall growth of 12% in the smartphone market. The total market is currently shared 19% by Samsung, 17% by Xiaomi and 14% by Apple, according to the report from the analyst firm Canalys.
This is not the first time that Xiaomi has overtaken Apple in the smartphone sector. The growth is a result of its domestic growth in China and comes at a key point where the firm is attempting to break into the premium market.
Xiaomi has seen massive growth in its overseas shipment while continuing to perform well in its home turf. According to the Canalys report, the company has seen a year on year growth of 50% in Western Europe, while expanding its presence in Latin America by 300%. They have also exhibited a tremendous 83% increase in overseas shipments year over year, compared to the 15% for Samsung and 1% for Apple. For Xiaomi, Q1 of 2021 saw a 54.7% rise in the gross revenue, at RMB76,9 Billion. Gross profits were up 87.4% at RMB14.2 Billion.
While Xiaomi lags behind Oppo, Vivo and Huawei in its domestic market with just 15% of the market share in Q1 2021, it is a dominant presence in India, the second-largest smartphone market in the world. It has been the biggest name in the Indian territory for over four years in a row, capturing 27.2% of the smartphone sector in Q1 2021.
Another major reason for Xiaomi’s global growth is the state of its Chinese competitors in the international market. While it is only in fourth place in its domestic territory, Xiaomi does not face the same opposition from these domestic rivals in the international market, where its main competitors are Samsung and Apple. Oppo and Vivo are both attractive options for budget phones but does not have the foreign appeal or popularity of Xiaomi, especially in a crucial market like India. And with the US sanctions hurting Huawei’s penetration in the international market, Xiaomi has become the best out of China, capitalizing on the favourable climate to capture the budget phone sector with its attractive models.
However, their phones are still catering to the budget consumers, with their average phone still selling at 75% cheaper than Apple’s handsets. The company is still behind in the premium category, where the competition is stiff between Apple and Samsung. Earlier this March, they announced the launch of their latest high-end phones in the Mi 11 series. The Mi 11 Ultra, starting at $928 is their attempt to break through to the premium international market. The price point pits it against some of the high-end models of Apple and Samsung and comes at a time when its rival Chinese phone makers Oppo and Vivo are also trying to capture the same market.
At the same time, the company is also looking into diversifying its revenue streams by entering other avenues of technology. They have announced their entry into the Electric Vehicles sector, which is projected to grow 51% in China year over year in 2021. The company will invest $10 billion over the next 10 years, competing with the likes of carmakers like BYD and Nio, as well as online search titan Baidu.