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August 5, 2014

Apple and Samsung slide in China as Xiaomi takes lead

Over 26 million Xiaomi smartphones fly off the shelves.

By Ben Sullivan

A four-year-old Chinese phone maker has overtaken Apple to become the biggest seller of smartphones in China.

Xiaomi, which recruited senior Google executive Hugo Barra last September to operate its international sales, also overtook Samsung in shipments, taking a 14% stake on the back of 240% year-on-year growth.

"This is a phenomenal achievement for Xiaomi," said Shanghai-based Canalys Research Analyst Jingwen Wang.

In Q2 2014, mainland China accounted for 37% of global shipments of smartphones – some 108.5 million units. Of the top five vendors in China this quarter, all but one were local companies.

Samsung and Apple, the only international vendors in the top 10, together accounted for shipments of 20 million units, representing 18% of the overall smart phone market in China.

Wang said: "Undoubtedly this was helped by an anticipated, temporarily under-strength Samsung performance during the quarter. But that is only half the story – Xiaomi has also executed on its strategy to grow volume shipments. It has delivered compelling products at aggressive price points, focused chiefly on its locally relevant MIUI software features and services, backed by effectively targeted marketing.

"In particular, its affordable RedMi range is booming and has been the driver for growth, despite attracting less global media attention than its flagship Mi products. But it does now need to deliver LTE products in China to address growing demand for 4G services if it is to retain its momentum."

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Xiaomi has shipped 26.1 million smartphones during the initial six months of 2014, reporting a quadruple rise from 7 million devices sold during the same period last year.

Research from Kantar revealed that nearly a quarter of new users had previously owned a Samsung device.

Xiaomi, which aims to ship 60 million handsets this year and 100 million by 2015, is rapidly becoming one of the key players in China’s highly competitive smartphone market.

Valued at $10bn in a fundraising event conducted in August 2013, the privately held Xiaomi sells RedMI and Mi3 devices, which were among the world’s top 10 bestselling smartphones in April 2014.

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