Chapter 3

Xiaomi mobile phone profile and its SWOT analysis

3.1 Xiaomi mobile phone profile

Xiaomi mobile phone is Beijing Xiaomi Technology Limited Liability Company

developed a high-performance smart phone. Xiaomi mobile phone adhere to the
"enthusiastic fan" design concept, the world's top mobile terminal technology and
components applied to each new mobile phone. August 16, 2011 Xiaomi mobile
phone M1 officially released. Mi 1 appears immediately caused a sensation in the has
been choppy mobile phone market. And this is not only because of its powerful
configuration, but also because of its attractive price, so that the popularity of Xiaomi
rapidly rising. Almost overnight, "Xiaomi" has become a hot topic on concern mobile
phone enthusiasts. Followed by a series of listed M2, M3 and Redmi pushed Xiaomi
phone on the front of the domestic mobile phone.

As of the end of April 2014, Xiaomi mobile phone has jumped to the Chinese
market mobile phone brand ranked No. 7, beyond Lenovo, ZTE, HUAWEI, ranking
first in the domestic mobile phone brand.

In China, Apple iphone is the champion, other foreign company share the mobile
phone market, Xiaomi mobile phone is like a lion into the wolves, disrupting the
traditional sense of the mobile phone marketing model; Like a shining star, the release
of their bright brilliance, writing and guiding the future of domestic mobile phones, at
the same time, Xiaomi mobile phone super high cost performance also makes each
product become the most worthy of the year looking forward to smart phones. On
March 13, 2014, in the sale of 8 minutes and 4 seconds 5000 mobile phone were sold
out, enough to see its popularity.

Lei Jun introduced the origin of Xiaomi name, Xiaomi logo is a "MI" shape, is the
abbreviation of Mobile Internet, on behalf of Xiaomi is a Mobile Internet Company;
The second is mission impossible, Xiaomi to complete the can't completed task; of
course, he want to use Xiaomi and rifles to conquer the world. Finally, hope
"Xiaomi" this lovely name to become everyone's friend. In addition, Xiaomi logo
inverted is a Chinese heart word, less a point, which means that Xiaomi to allow users
to save a little heart. Figure 3.1 shows the Xiaomi logo .

Fig.3.1 Logo of Xiaomi

3.1.1Mitalk

Mitalk is Xiaomi production of a mobile phone terminal free instant messaging

tool, it can not only cross iPhone, Android, Symbian mobile phone platform, can also
cross China Mobile, China Unicom, Telecom so on different operators. As long as
through the mobile phone network (WiFi, 3G, GPRS),can communicate with the
relevant contacts for real-time information communication, send and receive pictures
and audio, it is important to consume only network traffic.

(1) Free message: receiving the message to save money and effort, convenient
communication;
(2) Information on the status and feedback in a timely manner: know when is typing ,
can know whether the message is received by the other party, whether to see;
(3) The file free of charge to send: don't need hard typing, directly use Mitalk upload
the figure to watch for free;
(4) Three network interworking: convenient and safe , bold communication with
around the world ;
(5) friends to share: to share the interesting gossip, walking in the front line of the
fashion trend.

3.1.2 MIUI

MIUI officially released on June 1, 2010, it is Xiaomi company depth

customization of an Android mobile phone operating system, MIUI aim at native
Android system for a number of improvements to optimize, its user covers in 23
countries, by the majority of mobile enthusiasts highly sought after. MIUI original
features MIUI interface system, is committed to providing smart phones in the most
extreme calls and text messages comfortable experience ,for Chinese users use habits
are perfect match, Xiaomi technology is China's first use of Internet development
model for mobile phone operating system development team , reference MIUI
Community enthusiasts feedback to improve, weekly updates iterations, always give
users the latest experience. And MIUI has the world's largest mobile phone wallpaper
theme library, personalized themes and lock screen mode, as well as a wealth of
custom methods.

3.2 Introduction to SWOT analysis method

SWOT analysis method is a kind of enterprise strategy analysis method, which is

based on the enterprise's own inherent conditions to analyze, find out the advantages,
disadvantages and core competitiveness of enterprises. The internal factors: S
represents strength , W represents weakness; The external factors: O represents
opportunity, T represent threat.
3.3Xiaomi mobile phone SWOT analysis

3.3.1 Strength

Xiaomi mobile phone can win the hearts of the people, its advantages are mainly
summarized as five aspects: the enterprise internal advantages, mobile phone itself
advantage, price advantage, sales channel advantage, unique promotional strategy.

Enterprise internal advantages

1. Leader 's personal charm

Xiaomi technology leader is Kingsoft chairman and famous angel investors-Lei

Jun, he by virtue of the industry for many years of achievement influence, gather
industry top elite, formed the Xiaomi seven ultra-luxury joint founding team; At the
same time rely on personal good personal connections, success and Vancl logistics
cooperation, to achieve full-line sales; and through their powerful celebrity effect,
Xiaomi successfully fired the first shot.

2. The strength of the creative team

Behind so proud achievements in Xiaomi, is the co-founder of Xiaomi company

strength team, which is responsible for Xiaomi industrial design and supply
chain management team Liu De graduated from the world's top design school
ArtCenter, responsible for the MIUI operating system is Li Wanqiang ,before was
PowerWord general manager, responsible for hardware and BSP, Zhou Guangping is
the original Motorola R & D center chief engineer in Beijing , responsible for Mitalk
Hon Feng is the original Google senior engineer, including former Google vice
president of Engineering Research Academy in China -Lin Bin, former chief
engineer of Microsoft Engineering Institute- Huang Jiangji. The co-founders have the
international and domestic first-class enterprise with an average of over 15 years of
experience. Except the seven founders, Xiaomi company have hundreds of engineers,
in their passion collision, Xiaomi phone appeared on the dual core 1.5G CPU,
running speed is referred to as "fighter" in the mobile phone."

Mobile phone own advantage

1 China's first dual-core 1.5G smart phone

Xiaomi mobile phone is considered to be the world's fastest processor

manufacturer of Qualcomm MSM8260, provides reliable technical support for the
performance of the Xiaomi mobile phone. In the overall system fluency, screen
resolution and video camera function, Xiaomi phone has reached the top level.

2 Miflash ----- Over-The-Air technology upgrade

Compared with other mobile phone manufacturers, Xiaomi technology to

encourage people to flash. Through the flash, and then can achieve the purpose of
improving Xiaomi phone performance. Every Friday, Xiaomi official website will
update a new software upgrade package, and then repair before system vulnerabilities
and add some new features.

3 Reshape Xiaomi mobile phone's "CSP"

C is the Contacts; S is the SMS (refer to SMS and MMS); P is the Phone (phone
calls, voice calls).

In recent years, with the Apple mobile phone system ios, Android development,
the rapid development of smart phones, but also makes the smart phone slowly began
to spread. At the same time the birth of the application software is also more and
more, application software has become also increasingly rich, but weakened the cell
phone signals, batteries and other fundamental performance, deviated from the
original intention of communication tools. And Xiao phone is equipped with a large
battery of 1930 milliampere(mA), beyond the smart phone battery capacity nearly
30%, can support network standby time up to 450 hours, continuous talking 15 hours.
And, no matter how to grip, do not affect the Xiaomi phone reception signal, formed
a Xiaomi phone's unique advantages.

4 High-end work and comfortable feel

Xiaomi phone production process has been at a very high level, compared with
Samsung and other international brands . In addition, the Xiaomi phone's overall
manufacturing process, including the operating system MIUI are also converted to
production and design for Chinese people .

5 MIUI interface suitable for Chinese people to use

Xiaomi technology own research and development MIUI operating system, the
purpose is to create a more suitable for Chinese people's operating habits of the
system. So it is particularly impressive in the domestic machine.

The survey reflects the Xiaomi mobile phone accounted for 65.91%, followed by
price is cheap accounted for 59.09%, high hardware configuration accounted for
27.27%, MIUI system easy to use accounted for 13.64%, the good corporate
image accounting for 4.55%, 13.64% think that there are other reasons
 Corporate image
others 13.64% 4.55%
MIUI system easy
to use 13.64%

Cost performance
65.91%

Price is cheap
59.09%

High hardware
configuration
27.27%

Fig.3.1 The analysis of Xiaomi competitive advantage

Price advantage

Using the cost pricing model, gross profit margin only about 15%, from the initial
Xiaomi series 1999 yuan to the present Redmi series 799 yuan, with China
Unicom, Telecom jointly launched part of the contract machine, the direct deposit to
hundreds to two thousand telephone fee you can use it for free. At the same time in
the price of Xiaomi to achieve the highest quality configuration, compared to other
domestic smart phone, Xiaomi phone price advantage is particularly obvious, high
cost performance.

Sales channel advantages

(1) "Electronic business model"

Xiaomi phone only online sales, such as the E-commence under Xiaomi
technology, Xiaomi.com. This model not through mobile phone dealers, to take
the way of online sales, not only save the cost, but also save time. Make full use of
the characteristics of fast and convenient online shopping .
(2) The Xiaomi mobile phone logistics and inventory to the Vancl to do, take the e-
commerce channel + logistics cooperation distribution channel model, did not take
the traditional marketing model, eliminates the need for expensive promotion and
channel costs.
(3) Xiaomi mobile phone using online booking first, then reproduction mode, that is
produced products are sold, to achieve a zero inventory, saving a lot of cost.
(4) After-sales service guarantee policy

Want to buy and have purchased Xiaomi phone consumers, will be worried about
Xiaomi phone after-sales problem. About Xiaomi mobile phone after-sales,
Xiaomi technology has made commitments and has implemented the national
provisions of the three guarantees service. In addition, Xiaomi phone also
provides consumers with door-to-door pickup, returns and exchanges ,
maintenance hardware and software and other services, more convenient for
consumers to solve their online sales after faced after-sales problem.

Unique publicity strategy

1.High-profile conference publicity

Use the appearance is similar to the Apple Company conference, pocketed the
people's attention, Xiaomi mobile phone conference publicity strategy, is also an
innovative domestic mobile phone brand sales, is the first time in China. Has gained
wide attention from consumers and the media. Followed by Xiaomi again and again to
attack, the network Xiaomi is overwhelming. And then for its subsequent sales has
laid a solid foundation.

2.The Use of online advertising promotions

Mainly through micro-blog ,forums and other issued a variety of messages of

Xiaomi.
3. The use of social media mode

Use of word-of-mouth marketing, the use of cost-effective features, so that

Xiaomi mobile phone consumers to stimulate their potential consumers to buy their
products, thereby further reducing the cost of marketing, so also make up for the
problem of production cost is too high.

3.3.2 Weakness

Xiaomi phone shortcomings are: mobile phone itself defects , lack of credibility,
after-sales service has been questioned.

Mobile phone itself defects:

1.There are many hardware problems

1 The screen become warped foot problem

○

2 The phone off the paint problem

○

3 The back cover closing cracks imprecise problems

○

4 Phone body shaking have a sound problem

○

5 In the original accessories without headset

○

6 Battery heating problem

○

In the Xiaomi phone official forum, has been buying Xiaomi phone consumers
continue to complain about the problems of Xiaomi phone, there are tens of thousands
of feedback on the problem. Including the question of Xiaomi mobile phone delivery
speed, often crashes so on more than a dozen problems, there are some users apply for
return and replacement machine, these problems cannot be underestimated, will affect
the future development of Xiaomi.
2.Lack of credibility

Xiaomi is a rising star, established only three years, in the HTC, Samsung, iphone and
other smart phone occupy most of the market share, Xiaomi was born , the occupation
rate is obviously insufficient in market share, and no good reputation is built in the
public mind. With Xiaomi phone frequently exposure light leaked, off the paint ,
battery heating problem, system bug and inadequate after-sales service, to the
credibility of Xiaomi is a blow, but also a test of public patience.

3.After-sales service has been questioned

Xiaomi phone to provide customers with the main customer service channels
have online customer service, micro-blog customer service, telephone customer
service three kinds. But it has caused a strong consumer dissatisfaction: such as
telephone customer service often can not get through, online customer service, micro-
blog customer service no response and other issues. Xiaomi technology itself also said
that in the current circumstances, the return is need three to five days. Is to go through
a lot of processes, including delivery time, mobile phone testing, you have to spend at
least a week's time. This also makes Xiaomi mobile phone advertised maintenance is
completed within five days become a dead letter.

So many cities in China, only 29 cities have a "the house of Xiaomi " service
station, and that in Beijing and Shanghai so popular cities have only one maintenance
point, so few service stations is difficult to ensure timely processing of customer
service quality problems .

Worry about the system stability and the quality of the product workmanship of
people each accounted for 63.64%, worry about after-sales service and battery heating
problem respectively accounted for 63.36%, 43.18%, and 9.09% are worried about
other issues.
70.00%
63.64% 63.64%
60.00% 61.36%

50.00%
43.18%
40.00%

30.00%

20.00%

10.00% 9.09%

0.00%
After-sales System stability Battery heating The quality of the Others
service can or problem product
can't guaranteed workmanship
Fig.3.2 Choose Xiaomi mobile phone concerns

3.3.3Opportunity

1. Competitors to weaken

Jobs's death to the Apple Corp faced a huge challenge, to a certain extent, weakened
the competitiveness of the Apple Corp, to other relatively weak mobile phone
companies to bring opportunities.

2.Mobile phone computerized trend

Convenient mobile phones will replace the cumbersome and inconvenient PC. So the
market demand for smart phones will be far greater than before. there are 78
companies to do RMCPU in China, the cost will be a qualitative decline, to promote
the entire smart phone computing power, and cost optimization. This will drive the
entire mobile phone industry.

3.The development of future mobile terminal

With the construction of the communication network terminal and the invasion of the
application program on the network, 3G era has come . Xiaomi smart phones in the
mobile market also has a certain weight , and achieved better development.

4. China market advantage

China's large population, and most consumers will have more than two smart
phones, then most of Chinese consumption concept are biased high quality and
cheap, Xiaomi phone just to meet this demand.

3.3.4Threat

1. Fierce competition in the smart phone industry

Now the world economic depression, the wave of financial crisis affected all
walks of life, but the mobile Internet market is only good scenery. The field of mobile
terminal in mobile phone, Apple iPhone and Samsung occupy the high-end
market, while the domestic mobile phone brands such as Lenovo through the
cooperation with network operators to launch a variety of civilian-level smart phone
to win the public eye. Xiaomi technology and other Internet companies can not wait
to join the war situation, the rising of war to make smart phone market to form a multi
-polarization. Set up three years of Xiaomi, although the performance is not low,
occupy a place in the domestic smart phone, but there are still many unsatisfactory
places. In the fierce competition smart phone market is still weak, ,want to jump into
the international market even exercise.

2.The independent property rights is not high

Xiaomi hardware application interconnection, in addition to Qualcomm, like

Sharp, Samsung, TPK, Wintek and DESAY and other top-level components suppliers
are Xiaomi partners. There are gains and losses, in the support of these first-class
suppliers, Xiaomi mobile phone independent property rights is not high also is a
defect, it will be an obstacle to Xiaomi future.

3. Pressure from public opinion

Anti-fans of Xiaomi tried to fabricate a variety of negative new to damage

Xiaomi's image ,due to itself problems and users questioned its customer service,
causing the most of people and the media a hot discussion on the Xiaomi mobile
phone, the public opinion has enormous pressure on the future development of
Xiaomi mobile phone.