Challenging Apple by imitation

Nov 01 2012, 09:41 IST
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SummaryApple and its late co-founder have no shortage of challengers in China, a country that analysts expect will overtake the US this year as the world’s largest market for smartphones.

Sue-Lin Wong

When Lei Jun, the head of Xiaomi, one of the fastest-growing smartphone companies in China, talks about Steven P Jobs, he is full of praise—and a hint of envy. “When Steve was alive, he was the best,” Lei said during a recent interview. “Nobody could surpass him. Nothing could surpass the iPhone.”

Apple and its late co-founder have no shortage of challengers —not to mention emulators—in China, a country that analysts expect will overtake the United States this year as the world’s largest market for smartphones. Chief among the rivals is Xiaomi, whose newest smartphone has been expected to go on sale this month for 1,999 renminbi, or $320 —less than half the starting retail price of an iPhone 4S in China. Pricing for the iPhone 5 in China has not been set.

Less than three years since it was founded, Xiaomi, meaning “little rice,” has become a rising star in the Chinese smartphone market. The company predicts that by the end of 2012, sales will reach nearly seven million phones and revenue will be at 10 billion renminbi—impressive for a company that sold its first smartphone in August 2011.

The scene at a Xiaomi event in August of this year was reminiscent of Apple’s typical product introduction under Jobs, who died last October. Lei strode onto a stage in the trendy 798 art district in Beijing to show off the Mi-Two to a roomful of cheering fans. He was dressed in a black polo shirt, jeans and black converse shoes, not much different from Jobs’s trademark outfit.

Xiaomi’s marketing strategy has been to ride on the back of the “cult of Apple” and of its creator, said Wei Wuhui, a technology industry expert at Shanghai Jiaotong University. “Many Chinese consumers have come to idolise the Apple brand, and Xiaomi has been there to provide a similar product at a much cheaper price,” he said.

Fans—and critics—have been known to refer to the Xiaomi smartphone as the “Chinese iPhone.” In one of Beijing’s many China Unicom stores, a sales representative describes Xiaomi as “the little brother of Apple.” And customers are happy to buy into this image. “Xiaomi is the real fake,” Oliver Jin, a university student in Shanghai who hopes to buy a Xiaomi, said approvingly.

Apple opened its first store in China in 2008 and began selling the iPhone in the country in 2009. It originally had plans to open 25 stores by

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