Xiaomi says there is no car project yet
In the week of February 15th, 2021, there were several rumors that Xiaomi, a Chinese smartphone manufacturer, was planning to make electric vehicles. On the other hand, some media including Gizmochina reported that there was no car project in Xiaomi yet.
We still do not know what truth is. However, the only thing we make for sure is that an electric vehicle is really hot topic in early 2021. It seems that not only automotive manufacturer such as SAIC and Geely but also IT companies such as Baidu, Alibaba and Didi Chuxing are entering the EV market.
Who is Xiaomi?
Xiaomi Corporation is a Chinese multinational electronics company and it was founded in April 2010. The head office is located in Haidian District, Beijing, China. Xiaomi offers software with smartphones and smart hardware connected by the Internet of Things (IoT) platform at its core. The corporate vision is to be friends with its users and to be the “coolest company” among users.
Xiaomi always tries to innovate through the quality and efficiency of its products and services. It makes high quality products available so that everyone in the world can experience his/her better life through innovative technology.
Xiaomi has sold more than 213.2 million smart devices (excluding smartphones and laptops) connected to its platform. The company has established the world’s largest consumer IoT platform. In 2021, Xiaomi’s products are present in more than 90 countries and regions across the globe.
Why do smartphone makers consider entering the market?
As we see the other article about a possible partner with Apple Car Project, it seems that smartphone manufacturers seriously think of entering the EV market. The key question here is why do they consider? There are two big reasons: Stagnation and Interface.
First, the smartphone market is stagnant. Let us see the number in more detail. The number of smartphone shipment was about 173 million in 2009 and about 1,300 million in 2014, respectively. The number more than 7 times from 2009 to 2014. If we assume the average price of a smartphone was $200 in 2009, so the market size became almost $35 billion at that time. If we assume that the average price of a smartphone was $300 in 2014, the market size became $390 billion. Base on our assumption, the market was grown by more than 10 times for only 5 years.
However, the number of shipment is stagnant now. In fact, it was about 1,400 million shipments in 2018. If we assume the average price of a smartphone was $400 in 2018, the market size is almost $560 billion. Therefore, it is natural that Xiaomi wants to not only increase the market share but also find a new market.
Nowadays, the source of values has been not hardware but software. Of course, it does not mean that hardware is unnecessary. However, hardware is necessary to reach the touchpoint between human being and it. In other words, if the companies want to gather consumers’ data, touchpoints such as camera, sensor and screen are crucial.
For example, when we use iPhone, Apple can easily gather our data relating to our health. Technology companies can transform mere data into new value. In the case of Apple, the company can offer the subscription service to help us improve our health. In this sense, smartphone (hardware) becomes “the source of the source of value”. Electric vehicles also can be “the source of the source of value”
- Value is software or a services
- The source of value is consumers’ data
- The source of the source of value is hardware to offer the touchpoint between consumers and products