| MUMBAI, July 15
MUMBAI, July 15 China's Xiaomi said it intends
to invest heavily in India as the budget smartphone maker
launched on Tuesday its flagship Mi phone and other products in
the world's third largest smartphone market, currently dominated
by Samsung Electronics Co Ltd.
Xiaomi's International Vice President Hugo Barra, a former
Google Inc executive who joined last year, said the
company does not expect to turn a profit in India any time soon.
He said the privately owned Xiaomi was planning to build
India-specific features for its phones and set up a local team
to help penetrate one of the world's fastest growing smartphone
"We realise this is a market where we have to invest heavily
in," Barra told Reuters. "There's no point in thinking about
profits at this early stage," he said by telephone from New
Delhi, where Xiaomi launched the Mi 3, the cheaper Redmi and its
Localisation will be key to Xiaomi's fortunes in India,
where it will have to convince users to turn away from the apps
and services they are used to and adopt Xiaomi's own system.
Xiaomi's success in China has partly come from its unique
Android operating system, which it tailored to its customers.
The company's margins on phones are thin, as they use
high-tech hardware, but it makes up for that by selling its
higher-margin accessories and customised apps.
Xiaomi's success has partly stemmed from its affordability.
The Mi 3, Xiaomi's latest smartphone, is priced at 13,999 rupees
($230). According to Neil Shah of Counterpoint Technology Market
Research, the phone's features are comparable to the Samsung
Galaxy S4, which costs between 29,000-30,000 rupees.
India ranks behind China and the United States in smartphone
sales, with up to 90 million smartphones expected to be sold
there this year, according to Counterpoint Technology Market
In India, Xiaomi is selling its products via ecommerce
Xiaomi is better known globally as China's answer to Apple
Inc, an image that billionaire Lei Jun had fostered
initially when he founded the company in 2010 by dressing in the
black tops, jeans and sneakers favoured by the late Steve Jobs.
In China, Xiaomi has built a fan base much like Apple.
Barra said Xiaomi would remain focused on emerging markets
and was planning to launch in Indonesia next. He did not specify
a time frame.
Xiaomi became the world's sixth-largest smartphone vendor in
the first quarter of 2014, according to data firm Canalys, after
repeatedly doubling its sales. The company, valued at $10
billion last year, expects to sell 60 million phones this year.
($1 = 60.1600 Indian Rupees)
(Reporting by Nivedita Bhattacharjee in Mumbai; Editing by