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8/27/2014 Xiaomi plans R&D centre in India, Bangalore may host local centre for Apple of China - The

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By Gulveen Aulakh, ET Bureau | 27 Aug, 2014, 09.09AM IST Post a Comment
Xiaomi is now focused on streamlining production at
the backend in China to ensure a steady supply of
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Xiaomi plans R&D centre in India, Bangalore may host local
centre for Apple of China
NEW DELHI: Xiaomi, China's largest handset maker which has created a stir with its flash
sales strategy, has identified India as a key market and said it plans to set up an R&D and
design centre in Bangalore that will focus on customising devices for local consumers.
"In the next 12 months, we want to have built a significant presence here," Hugo Barra, vice-
president for international operations at Xiaomi, told ET. "We want to have an R&D centre with
an actual engineering team with designers, product managers and software engineers, who will
build features for the Indian market within India, not just localise features." Barra, 37, joined
Xiaomi in 2013 after a five-year stint at Google, including some time at its Android unit.
Since joining Xiaomi in 2013, Barra has spearheaded the Chinese company's successful
expansion into international markets such as Singapore, Malaysia, the Philippines and now
India. The company, founded in 2010 by eight partners, now plans to enter Indonesia, Thailand,
Russia, Turkey, Brazil and Mexico.
Xiaomi has so far sold 95,000 Mi3 smartphones, priced at Rs13,999, through six flashes sales
within a month via ecommerce site Flipkart. It has been criticised for bringing in supplies at a
tenth of the demand, leaving thousands of potential buyers miffed.
Barra conceded that the company ran into production issues for its India-focused phones since hardware and antenna calibrations were
different for the market, amounting to a physical difference in the devices meant for the country. Therefore, stocks meant for China or Taiwan
could not be redirected to India, which meant the limited stocks ran out almost as soon as the flash sales opened. "India is the most different
market that we've had so far, with the most heterogeneous requirements from a network perspective," he said.
The company is now focused on streamlining production at the backend in China to ensure a steady supply of devices, Barra said. The
handset maker is trying to gain a stronghold in the surging but intensely competitive Indian smartphone market, where the cheapest device
comes for as low as Rs 1,999.
Xiaomi, popularly called the Apple of China, has made a name for itself offering phones mirroring Apple's user interface coupled with Android
apps at around a fourth of iPhone prices, riding its cost-effective online sales strategy, a move that has taken it to the No. 1 vendor spot in
China surpassing established players such as Samsung. The company is adopting the same strategy in India.
The expansion into India is logical given that the South Asian nation is among the fastest-growing markets, with smartphone shipments
expected to cross 80 million devices this year, double the number in 2013, driven by the plunging cost of devices. Xiaomi's strategy of offering
affordable but feature-heavy smartphones also ties in well with the government's vision of a digitally connected India where all citizens are
expected to have smartphones by 2019, through which the Centre expects to deliver e-services such as health, education and financial
Barra wants to start designing products from the ground up in each of the markets Xiaomi operates including India, to tide over local issues."It
will become more severe since India has dual-mode LTE, so our devices will have to do 2G, GPRS, 3G, FDD-LTE and TDD-LTE, making
India the only market for us today where a fivemode device is required," Barra explained, underlining the engineering challenges it will face in
introducing dual-mode LTE-enabled Mi4 by December-end, the only kind it will make for a single market globally.
Barra said his aim is to have simultaneous launches at least in China and India to begin with, by next year, putting both the countries on a par in
terms of importance.
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Xiaomi is also planning to set up its own call centre with the after-sales services lead team based in Bangalore, Barra said. Xiaomi currently
operates with skeletal staff led by India head of operations Manu Jain. Currently, services such as customer care, call centre and after sales
are outsourced.
On Tuesday, Xiaomi launched the Red Mi 1s smartphone at a marked down price of Rs5,999 fromRs6,999, which will go on sale on
September 2. Registrations for the sale began at 6 pm on Tuesday.
Barra said the company was prepared with "multiple times the inventory of Mi3", which means a higher number of devices will be put up for
sale, but added that demand for this model is not likely to surpass that for the Mi3 despite its attractive pricing.