A couple of days ago, Xiaomi became the 3rd largest handset maker. Ive told my Speedsters several months ago that Xiaomi will be a massive force in the market, based on their business and marketing strategies. Its pretty obvious. But, theyre only the 3rd largest for 24hrs... Lenovo (formerly the 4th) just concluded their acquisition of Motorola, which made them the 3rd largest now. A number of people are saying that now Xiaomi will be facing tougher competition. The question is: Will Lenovo+Motorola stay on as 3rd for long or will Xiaomi take over again soon? Most likely, Xiaomi is going to grab the 3rd place again pretty soon. Here are just 3 reasons: 1. As a company, Xiaomi is much more focused and have a much stronger, clearer strategy than Lenovo. This is underscored by their meteoric rise and getting valued on par with Lenovo within just 3 years! To put that in context: Lenovo has been around for 30 years. (However, their mobile business is also pretty young; couple of years old.) 2. Xiaomi is barely growing out of their main market in China. The potential for growth for them is huge! Theyre just starting their global expansion plans. Literally still a baby. Lenovo, on the other hand, already have presence in around 160 countries. This may seem like an advantage for this older brand. However, strategically, it can also be a huge liability as the market is already familiar with it and may find it as a old, tired brand. One key thing: They dont have the hype that Xiaomi has. And they certainly dont have the almost fanatic fans that Xiaomi has. And as we know, its all about the fans. 3. Acquisitions are not as rosy as what most think. Lots of acquisition dont end well. On paper it may make sense. But often times there are leadership tussles, culture shock for both sides, misalignment, etc. Often times they spend more time fixing internal problems and fighting fires that distract them from the fight out in the marketplace. So, unless Xiaomi gets distracted and loses focus, itll regain the 3rd spot very soon... easily.
Posted on: Mon, 03 Nov 2014 11:55:07 +0000
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