Iphone vs Xiaomi

Topics: IPhone, Mobile phone, Smartphone Pages: 6 (2009 words) Published: December 8, 2012

For this case study, we will be looking into the mobile phone sector in China. As of April 2012, there are 1023.7 million mobile phone subscribers of which 250 million of them are smartphone users. In recent years, two market players have grown tremendously amidst the very saturated smartphone market. They are Apple and Xiaomi. This paper will compare and analyze both similar and different marketing strategies that have been undertaken by both companies to achieve the phenomenal success they have today in China.

General Information

Apple was founded very early in America on April 1976. The first iPhone created by Apple was released to the Chinese public in 2009 and it slowly gained popularity among the Chinese. According to Apple’s Chief Operation Officer Tim Cook, iPhone sales in China grew by almost 250% between 2011 and 2012 to bring Apple’s revenue in China to just under US$5 billion, representing about 10 percent of Apple’s total revenue internationally.

Xiaomi was founded in China on April 2010. The Xiaomi Mi-One phone was first released for sales in China on August 2011. In July 2012, the founder of Xiaomi, Mr Lei announced that the company made US$9.6 billion in sales for the period ending in June 2012. It was last valued at US$4 billion after it managed to raise some US$216 million in a funding round.

Similar Strategies

1. Creating Brand Loyalty

For both products, there has been large amounts of investment by their companies to create much hype and subsequently a following for the products. In Xiaomi’s case, the brand has an estimated 2 million fans with about 1.3 million followers on Sina Weibo. Such a strong fan-base provides a good channel for marketing and also for feedback on features. In addition, such brand loyalty allows Xiaomi to create a lifestyle around the phone so that it becomes indispensable for the consumers. As for Apple, they too have a fan-base. Many of them see the iPhone as something unique and different from the others mainstream phones. As a result, they are very willing to pay a premium price for the phone. In addition, owning an iPhone is also a symbol of achievement as it shows that one can afford the high price. Hence, majority of their fans are people in the middle to upper income gap of China’s society.

Figure 1: Xiaomi Fan during a conference
Figure 1: Xiaomi Fan during a conference
Figure 2: Apple Fans during IPhone 4s launch in Beijing
Figure 2: Apple Fans during IPhone 4s launch in Beijing

2. Good Product

In many businesses, there’s a saying that a good product sells by itself. This is especially true for companies in the technology business. As a device, the phone has evolved from being just a means of communication into a personal computer. Since the nineties, phones have slowly incorporated functionalities like the radio and camera function. Jump to now, we see that both the Xiaomi and Apple’s phone have raised the bar of what a smartphone should have. Instead of just the outlook, both companies have increased performance of their devices. All of these was done to improve the functionalities of the product so that it becomes easier to use for their consumers. With a good product, consumers would be satisfied and are more willing to spend in order to consume the new features that are provided by the phones.

3. Online Sales And Marketing

In this generation of advanced methods of payment via the world wide web, we see that both companies were able to fully utilize these channels. For Xiaomi, they had aggressive online marketing coupled with online pre-orders for their phones. These pre-orders resulted in creating a very large appetite for the Chinese consumers as it made the phone models very limited and thus highly sought after. In the launch of the Xiaomi Mi-One, 200,000 units of the model was sold in just 3 minutes and 15 seconds. This shows how successful Xiaomi was in its online marketing.

Apple too has a very strong...
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