Web: Once a darling, Xiaomi is facing tough questions

March 2016 by: From The Web

Not long ago, China’s Xiaomi was being called the next Apple, an epithet that rankled some at both companies. “I don’t see it as flattery,” scoffed Apple’s Jony Ive, who said of Xiaomi’s business model, “I think it’s theft, and it’s lazy.” Meanwhile, Xiaomi CEO Lei Jun felt the analogy was off the mark. “You can say it looks a bit like Apple. But it’s really more like Amazon with some elements of Google.”

This year, Xiaomi is looking like Apple in a way few expected: It’s already struggling with slowing growth.

In a few weeks, Xiaomi will turn six. It’s rare for any tech company to go from startup to global giant in such a short span of time. But if Xiaomi’s growth came at a breakneck pace, it is also showing signs of reaching maturity just as quickly, facing the growing pains of a middle-aged tech company even before it can celebrate toddlerhood.

In early 2015, Xiaomi was a company coveted by investors and feared by competitors. The firm had earned $12 billion in revenue in 2014, a year when sales of its smartphones more than tripled to 61 million units. Thanks to a private investment round that raised $1.1 billion, the company had a $45 billion valuation. Some investors, like Russian billionaire Yuri Milner, believed that figure would rise to $100 billion.

Today, Xiaomi remains China’s most highly valued unicorn and worldwide is second only to Uber. The company just released an update to its flagship Mi phone as it pushes into new countries while pumping out new gadgets. But that $100 billion valuation is likely going to have to wait. Because while Xiaomi is still growing, it’s doing so more slowly than the company had projected—or investors had expected.


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