Xiaomi unseats Samsung to gain China's smartphone throne - report

BEIJING Tue Aug 5, 2014 4:35pm IST

A user of Xiaomi uses his mobile phone to take a photo at a launch ceremony of Xiaomi Phone 2 in Beijing August 16, 2012. REUTERS/Jason Lee/Files

A user of Xiaomi uses his mobile phone to take a photo at a launch ceremony of Xiaomi Phone 2 in Beijing August 16, 2012.

Credit: Reuters/Jason Lee/Files

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BEIJING (Reuters) - China's Xiaomi Inc took China's smartphone crown in the second quarter after the Beijing-based firm replaced Samsung Electronics Co Ltd as China's largest smartphone vendor, according to data from Canalys.

Xiaomi shipped just under 15 million units in the three months ended June, while Samsung's 13.2 million unit shipments just beat China's Lenovo Group by around 200,000 units to take second place, said Canalys.

The three-year old Xiaomi, which closely apes many aspects of Apple Inc and its designs, also nabbed fifth place by global market share for smartphone makers in the second quarter, research firm Strategy Analytics showed last week.

But Canalys's data also shows that Xiaomi is still almost entirely dependent on its home market in China. Only about 100,000 smartphone units were shipped outside of China and the jury is still out on whether it can replicate its domestic success overseas.

The company is already setting up shop elsewhere in Asia in Malaysia, Singapore and the Philippines. In India, where Xiaomi launched the Mi 3 model last month, the company saw more than 100,000 people pre-register for a supply of 10,000 units.

Xiaomi is also looking to expand into other markets like Brazil, Mexico, Indonesia and Thailand with the help of Hugo Barra, the former vice president of the Android mobile operating system for Google Inc who is now Xiaomi's international vice president.

"I'm quite optimistic," said Sameer Singh, a Hyderabad-based analyst who writes about technology at tech-thoughts.net.

"They do have a problem right now, but it seems to be a supply problem more than anything else," he said. "Right now, international demand far outweighs supply. That could potentially make interested customers defect to other offerings."

Xiaomi's critics have also lambasted the firm for infringing on intellectual property rights. This includes using the logo from Apple's Aperture application on a picture of one of its phones.

The Chinese company, hailing from a market notorious for lax attitudes towards intellectual property, also saw its reputation tarred when people found that it had passed off copyrighted images as its own.

The original photographs were taken from places like National Geographic and picture hosting site Flickr and passed off as images taken with Xiaomi's smartphone camera.

(Reporting by Paul Carsten; Editing by Matt Driskill)

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