Budget Smartphone Upstart Xiaomi Invades Europe–Without Phones

In the barely five years since its founding, Chinese smartphone manufacturer Xiaomi has aggressively carved out a space for itself in the smartphone market with low-cost, feature-rich phones sold at razor-thin margins. Today at the Mobile World Conference in Barcelona, Xiaomi announced plans to open its first online store for Europe—stocked with accessories only, no phones—and it’s just the kind of strategic move to expect from Xiaomi.

Xiaomi’s expansionist strategies include selling phones cheap and making money on software and apps in the long run, which led them to sell 61.1 million phones in 2014, up from just 18.7 million in 2013, reports the Wall Street Journal. This reinvented smartphone business model is one of the reasons we named Xiaomi one of our most innovative companies in 2014 and again in 2015. Last year, we said that Xiaomi planned to enter other emerging smartphone markets, like India and Southeast Asia, but the company is not yet ready to sell smartphones in the U.S. or Europe. As The Guardian points out, releasing particular devices (like the Mi Note 4 phone) in Western markets would likely open the company up to copyright infringement lawsuits.

Apparently Xiaomi learned its lesson after it was temporarily banned from selling phones in India due to patent infringement claims brought by Swedish phone company Ericsson, as the The Guardian reported at the time. Xiaomi’s European expansion will likely be just as cautious as its recently announced U.S. expansion—that is to say, offering only smartphone accessories like headphones, fitness bands, and battery packs, but no actual phones.

Europe might be saturated with Android phones, but new and cheap accessories are always in demand. By building brand trust, Xiaomi is paving the way to enter Europe with its own competitively priced phones—whenever it can figure out how to safely navigate the patent gauntlet that has kept the two biggest smartphone manufacturers, Samsung and Apple, embroiled in vicious litigation for years.

[via The Guardian ]