Xiaomi is spinning off a premium smartphone brand it created for users in India as an independent company, a company executive announced on Friday.
Why it matters: The Beijing-based smartphone maker began its multi-brand strategy in 2018 in a bid to target different user segments and drive growth for its biggest business. Smartphones accounted for 60% of the company’s revenue in the third quarter.
- Xiaomi sub-brands also include gaming phone Black Shark, budget phone brand Redmi, and Meitu, a smartphone brand it licensed from a selfie app maker.
- The Poco brand has produced just one phone, the Rs 20,999 (around $295.6) Poco F1, which debuted in 2018 with the aim to take on high-end players in India such as Samsung, Huawei, and Apple.
- Xiaomi is the biggest smartphone vendor in the country holding market share of roughly 26% as of the third quarter of 2019. Redmi phones are its most popular offerings in India.
Details: Xiaomi global vice president Manu Kumar Jain said in a tweet that Poco had “grown into its own identity” and will become independent from Xiaomi.
- “Poco F1 was an incredibly popular phone. We feel the time is right to let Poco operate on its own,” he said.
- Details of the split have not been disclosed. Xiaomi did not immediately reply to TechNode’s inquiries on Sunday.
- The Poco brand had a team of more than 300 employees working on research and development in Xiaomi’s Shenzhen headquarters, according to a VentureBeat report in 2018 citing company executives.
- The Poco team borrows resources from its parent whenever it deems fit and leverages Xiaomi’s logistics and services infrastructure, the report said.
Context: Xiaomi reported in November the company’s slowest-ever quarterly revenue growth since its July 2018 listing on the Hong Kong stock exchange. It has decelerated in the face of aggressive competition from rival Huawei in China’s saturated smartphone market over the past few quarters.
- The company’s revenue in the third quarter rose to RMB 53.7 billion (around $7.8 billion) from RMB 50.9 billion the same period the year before, a 5.5% year-on-year increase.
- The world’s fourth-largest smartphone maker split off its Redmi smartphone line in January 2019 in a bid to present Xiaomi as a premium brand.