reason behind why Xiaomi is not saling Smartphone in USA and one more thing " Patents are not only a issue.. ??? "
Chinese mobile tech darling Xiaomi held a press event in Silicon Valley yesterday to introduce itself to the US. And while some thought the company might announce that its popular phones are finally coming to America, that is not happening this year.
Xiaomi president Bin Lin and VP Hugo Barra maintained at the event that the decision not to launch phones in the US has to do with things like America’s already-high smartphone penetration rate, but an obvious reason – and one raised by many journalists at the event, apparently – is patents. Xiaomi doesn’t have many of its own, and especially in the US market, that could open it up to tons of additional expenses.
Beyond patents, though, there’s another reason Xiaomi is taking things very slow when it comes to the US market: carrier subsidies.
In the United States, most smartphone purchases are tied to a specific plan and a specific telecom carrier. That carrier subsidizes the price of the phone in return for a multi-year service contract from the customer. If I were to buy an iPhone 6 in New York, for example, I could get one for just US$200 – so long as I also signed up for two years of mobile service with one of the iPhone’s available wireless carriers.
Of course, I’d still end up paying for the iPhone – the rest of the price is just factored into everyone’s wireless bills each month, and this system is part of why Americans pay some of the highest wireless bills in the world. But the up-front cost of a current-gen iPhone – the “sticker price” to the average consumer – is still just US$200.
That’s in sharp contrast to most Asian markets, where phones are usually sold separately from wireless plans. If you want to buy a current-gen iPhone in China, you’d better have more than US$800 ready to go when you walk into the store. And that massive up-front expense is a big part of why high-performance, low-cost alternatives like Xiaomi’s phones have done so well in Asian markets.
With carrier subsidies of its own, an American Xiaomi phone would almost certainly be free with a two-year wireless plan. But the iPhone costs just US$200, meaning that buying a Xiaomi saves the American customer just US$200. In China, in contrast, a consumer who picks Xiaomi over Apple will be saving more than US$500. The prevalence of carrier subsidies in the US guts Xiaomi’s price advantage.
Without an enticingly low cost to lure people in, the US is likely to be a difficult market for Xiaomi to crack. Although its brand cachet is growing, there’s no doubt that brands like Apple and Samsung have far more recognition, and if offered the choice between a Chinese Xiaomi for free or an iPhone for US$200, I suspect most American consumers would take the iPhone.
Until Xiaomi has some sort of answer to that (in addition to its patent woes), I wouldn’t expect to see any Xiaomi phones touch down in the USA.
China isn't like the United StatesXiaomi could do a better job than Amazon, but we wouldn't bet on it -- at least not in the current environment.
Americans may love a deal, but they're able to afford more expensive technology. American consumers are, as a whole, wealthier than their Chinese counterparts, and American carriers are more generous with subsidies and financing.
Unlike China, the U.S. is a mature smartphone market, and Google's services are well-established. While Google Play largely doesn't exist in China, it's dominant in the U.S., as is Google Search and Google Maps.
If Xiaomi hopes to compete in the U.S., it will either have to use a different business model, shipping devices with a more conventional version of Android, or offer smartphone owners something so compelling that they're willing to give up Google's services -- something no company, including Amazon, has been able to do.
Xiaomi is certainly a threat to Google and Apple in China, and possibly other emerging markets, but given the company's business model, it's unlikely to find success in the United States.
Xiaomi president Bin Lin and VP Hugo Barra maintained at the event that the decision not to launch phones in the US has to do with things like America’s already-high smartphone penetration rate, but an obvious reason – and one raised by many journalists at the event, apparently – is patents. Xiaomi doesn’t have many of its own, and especially in the US market, that could open it up to tons of additional expenses.
Beyond patents, though, there’s another reason Xiaomi is taking things very slow when it comes to the US market: carrier subsidies.
In the United States, most smartphone purchases are tied to a specific plan and a specific telecom carrier. That carrier subsidizes the price of the phone in return for a multi-year service contract from the customer. If I were to buy an iPhone 6 in New York, for example, I could get one for just US$200 – so long as I also signed up for two years of mobile service with one of the iPhone’s available wireless carriers.
Of course, I’d still end up paying for the iPhone – the rest of the price is just factored into everyone’s wireless bills each month, and this system is part of why Americans pay some of the highest wireless bills in the world. But the up-front cost of a current-gen iPhone – the “sticker price” to the average consumer – is still just US$200.
That’s in sharp contrast to most Asian markets, where phones are usually sold separately from wireless plans. If you want to buy a current-gen iPhone in China, you’d better have more than US$800 ready to go when you walk into the store. And that massive up-front expense is a big part of why high-performance, low-cost alternatives like Xiaomi’s phones have done so well in Asian markets.
With carrier subsidies of its own, an American Xiaomi phone would almost certainly be free with a two-year wireless plan. But the iPhone costs just US$200, meaning that buying a Xiaomi saves the American customer just US$200. In China, in contrast, a consumer who picks Xiaomi over Apple will be saving more than US$500. The prevalence of carrier subsidies in the US guts Xiaomi’s price advantage.
Without an enticingly low cost to lure people in, the US is likely to be a difficult market for Xiaomi to crack. Although its brand cachet is growing, there’s no doubt that brands like Apple and Samsung have far more recognition, and if offered the choice between a Chinese Xiaomi for free or an iPhone for US$200, I suspect most American consumers would take the iPhone.
Until Xiaomi has some sort of answer to that (in addition to its patent woes), I wouldn’t expect to see any Xiaomi phones touch down in the USA.
China isn't like the United StatesXiaomi could do a better job than Amazon, but we wouldn't bet on it -- at least not in the current environment.
Americans may love a deal, but they're able to afford more expensive technology. American consumers are, as a whole, wealthier than their Chinese counterparts, and American carriers are more generous with subsidies and financing.
Unlike China, the U.S. is a mature smartphone market, and Google's services are well-established. While Google Play largely doesn't exist in China, it's dominant in the U.S., as is Google Search and Google Maps.
If Xiaomi hopes to compete in the U.S., it will either have to use a different business model, shipping devices with a more conventional version of Android, or offer smartphone owners something so compelling that they're willing to give up Google's services -- something no company, including Amazon, has been able to do.
Xiaomi is certainly a threat to Google and Apple in China, and possibly other emerging markets, but given the company's business model, it's unlikely to find success in the United States.
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