After raising $1.1 billion in new capital, Chinese smartphone maker Xiaomi has been valued at $46 billion. This means it’s worth more in the eyes of investors than even over-performing Uber (currently valued at $41 billion) and is now the most valuable venture-backed tech startup in the world. That’s not only testament to the company’s growth – sales are up by 300 percent year on year – but it even managed to produce a small profit of $56 million last year. Dedicated apps have kept customers loyal (and offered alternatives to Google services blocked in China) while its online-only sales approach has created hype and saved money on stores. There’s just one element of Xiaomi’s business that will never be acknowledged: its debt to Apple.
While accusations of Samsung “stealing” from Apple were (mostly!) stupid people falling for aggressive Apple PR, Xiaomi is just absolutely, 100% shameless in its almost one-to-one copying of Apple products. If this company keeps growing and keeps pushing towards the west, they’re going to clash with Apple at some point – and the creepy nationalist, anti-east undertones that bubbled to the surface during the Apple/Samsung court cases will turn into all-out racism when this Chinese company inevitably gets sued.
So what if Samsung is being “inspired” by Apple’s old designs. Why shouldn’t Samsung take advantage of all of Apple’s marketing and ergonomics research? Apple is no saint when it comes to ripping off others when designing its products. In fact, now that Steve Jobs, Apple’s true visionary, is pushing up daisies, I predict that Apple will engage in stealing others ideas more and more. Turnabout is fair play.
Well, it shouldn’t if doing so would break a law that causes more in legal fees than it brings in revenue.
Which is why there are counter suits.
Listen, I think a lot of these cases, including Samsung v Apple are really stupid. But they’re stupid not because I say so. In fact, the courts taking them seriously, kind of proves that the courts don’t feel they are stupid given our existing laws.
That Ãœber is valued more than 2 cents is, in itself, just crazy.
Xiaomi will face patent licencing issues when they start to expand into the west, it may be easier to stay in China and sell.
The recent expansion into India already has courts stopping sales due to alleged non payment of Cellular royalties.
Apple and probably Samsung would also take Xiaomi to court for design theft.
On a Tangent is Xiaomi has been caught with earlier hardware phoning home to mainland China, this includes apps installed, music and video played.
One fellow used Cyanogen to remove the stock ROM and the behaviour continued indicating that it is hardwired in. Later models seem to have stopped this practice.
The only real way to stop this is to root the phone and install a firewall app.
Xiaomi can easily avoid any potential lawsuits. They simply have to sell online from a website in China. That means they are outside the legal jurisdiction of the US or EU and cannot be sued.
It is actually far more likely that major foreign companies such as Google, Apple and MS will be unable to operate in China within a few years.
It’s interesting but a bit odd that a company that only made $56 million profit in the last year should be valued at $46 billion. Over the last year the total profits of the Android hardware ecosystem fell by half. It may turn out that it is all but impossible to make much profit in Android hardware and what profits there are in the Android ecosystem may be only be made in software and services (an area that Xiaomi has put great effort into).
The interesting strategic question in relation to Android is, given that hardware profits are trending towards zero and the the vast bulk of (the not very large) profits in the Android ecosystem are accruing to Google, whether any company can challenge Google’s grip on the value added service stack.
This article raises an interesting question
http://ben-evans.com/benedictevans/2014/12/3/how-many-people-really…
Note: I know Amazon is valued very highly and only really breaks even but that is a little less perplexing because Amazon makes razor thin profits in order to fuel a ferocious reinvestment program and hugely ambitious constant growth trajectory. Personally I think Amazon is over valued but I can at least see an argument that it’s going places, I can see no similar argument for the Android OEMs.
Edited 2014-12-30 23:32 UTC
Xioami is a Chinese company. China is basically a Google-free zone. Xiaomi has no real competition at all from Google in it’s home market.
This remembers me of how software copyright worked here in Brazil in the 80s.
No company could send royalties out of the country and software was not protected by copyright (and patents still do not apply nowadays to it, luckly). So it was OK, by the law, if you copy a software providing you just didn’t infringe the trademark. This led to games like this, when Activision was replaced by CCE, a brazilian company: http://www.atarimania.com/2600/screens/pitfall_cce_2.gif
You just had to remove the company trademark, and violá, you could sell the software!
China in copyright terms is mostly like that, but they joining World Trade Organization is meant to change that. Soon.
Edit: Fix type and clarify image link.
Edited 2014-12-31 00:43 UTC
It has been suggested that US courts faviour US companies in patent disputes etc. I wonder how the Chinese bureaucracy, legal system, media will react to Apple hounding one of its companies through the courts combined with overtones of anti-Asian racism, my guess is not well.
China doesn’t mind pissing off Google or Microsoft, why would it be concerned about a shiny appliance maker? This will be risky for Apple they could lose the Chinese market and that would be a real shame.
Don’t forget that China is now officially the richest country, USA 2nd place. But yes, the USA has always bent truth to favor their “interests”.
Want some weapons of mass destruction ?
Do you have a link to here you got that figure, a quick search by myself gives USA at $17.5 Trillion and China at $10 Trillion.
http://www.therichest.com/rich-list/rich-countries/the-10-richest-e…
i’m split on this one, on one hand i could care less about protecting massive companies from competition.
on the other hand, profiting from other’s hard work based on trickery and deception is wrong, told to me by my mother and school teachers.
plus it’s just tacky.
http://nyoobserver.files.wordpress.com/2013/06/mcdowells.jpeg
it takes a lot of money and hard work to develop a brand and successful products, and in apple’s case they have been at it for over 35 years. so many of the people (some on this site) rip them left and right then go right out and buy a product that is an apple knockoff. to see those companies like samsung and this chinese company make so much money it just makes me kinda sad. there’s plenty of room to build something different than apple, and people have made lots of money making thing very unlike apple.
In the smart phones market as in the cars market every manufacturer is influencing and influenced by others.
Xiaomi copied nothing from Apple. Period.
Using the same style is not copying! If Mercedes were first to introduce a 4-door coupe car (the CLS), do you think Audi copied it when they introduced the A5? – I don’t think so.
Actually I’m quite disappointed of OSNews as I’m expecting the writers and readers in OSNews to understand what copying is regarding computers and software.