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Xiaomi to invest in more startups to bolster smart home push
[BEIJING] Xiaomi Corp will invest in "a lot more" startups this year, President Bin Lin said, as the Chinese phone maker seeks software and services to capitalize on the burgeoning business of smart homes.
The investments will include appliances and hardware that complement Xiaomi's existing devices, Mr Lin said during an interview at the company's Beijing headquarters.
Xiaomi took stakes in more than 20 startups in the past 18 months, Lin said, and the company has introduced products including air purifiers and light bulbs that can be controlled by smartphones.
"We are looking to invest in more this year, maybe a lot more over the next year," Mr Lin said. "This is a strategy that will continue."
Xiaomi is the world's third-largest smartphone vendor and, at US$45 billion, the most-valuable technology startup.
Chief Executive Officer Lei Jun on Thursday unveiled Xiaomi's largest, most expensive smartphones as the company moves into the higher end of the market to challenge Samsung Electronics Corp and Apple Inc.
Xiaomi doubled revenue to US$12 billion last year and more than tripled smartphone shipments to 61.1 million units on its way to becoming the No 1 smartphone seller in China. Mr Lei says the blistering growth isn't over yet, and at Thursday's press conference in Beijing he repeated the claim that Xiaomi can surpass Samsung and Apple in sales within a decade.
On Thursday, the company unveiled the 5.7-inch Mi Note that debuts Jan 27 for 2,299 yuan (US$370). A second device, the Mi Note Pro, will go on sale later for 3,299 yuan.
Last month, the company completed a US$1.1 billion funding round that included billionaire investor Yuri Milner's DST, Singapore's GIC Pte and All-Stars Investment Ltd. That gave the company a US$45 billion valuation.
"Xiaomi ourselves are focusing on three main areas of products: phones, TVs and routers," Mr Lin said in the interview. "Smart-home appliances and hardware are built by the companies we invest in."
On Dec 1, Xiaomi participated in a US$296 million investment in Internet data center services provider 21Vianet Group Inc. Less than a week later, Xiaomi announced its first investment in the US by participating in a US$40 million funding of Misfit Wearables Corp, maker of products including the Shine activity- and-sleep tracker.
The market for Web-linked appliances will grow to US$7.1 trillion by 2020, from US$1.9 trillion in 2013, according to International Data Corp. Xiaomi will strengthen its push into the business by boosting its intellectual property, Mr Lin said.
"In the next few years, you are going to be seeing a lot more patents granted to us," he said. "Many of these patents will be in areas like smart-home appliances, smartphones, smart hardware - rapid growth areas that we believe are going to be the future for the industry."
The company suffered a setback in its largest overseas market, India, in December when Ericsson AB won a court order blocking the import and sale of some Xiaomi devices that it said infringed wireless technology patents. The India court subsequently lifted part of the sales ban on Xiaomi devices using chips from Qualcomm Inc.
That covered almost all of Xiaomi's India business since the use of other processors was "close to zero," Mr Lin said. The company doesn't anticipate such issues slowing its overseas push.
"We are pretty confident that we can solve this issue and make sure that our international business can move on as we planned," Mr Lin said.
The company said in November it plans to enter Thailand, Russia, Mexico, Brazil, Turkey and Thailand this year.