China’s reigning smartphone market share leader Xiaomi Corp. introduced its first new flagship handset in nearly two years at the Mobile World Congress on Wednesday in a bid to revive its momentum after a year of slowing sales growth.
Xiaomi’s new Mi 5 smartphone is a slickly-designed premium smartphone that takes direct aim at flagship phones from Apple Inc. and Samsung Electronics Co.–at about half the price. The Mi 5 is priced at between about $250 and $350 before taxes, depending on memory storage and other features, compared with other flagship phones that sell for $600 or more.
Beijing-based Xiaomi, which is valued by some estimates at $46 billion, aiming at the global stage a few years ago with a lineup of affordable, sleek-looking handsets. But the company has seen some of that shine come off as its torrid sales growth appeared to slow, and the buzz shifted to other Chinese players like Huawei.
Last year, Xiaomi shipped 64.9 million handsets last year in China, edging out No. 2 Huawei with about 15% of the market compared with Huawei’s 14.5%, according to data tracker IDC. Apple ranked third, with 13.4% market share.
However, Xiaomi’s sales growth was the slowest of the top-five Chinese players. In addition, the average selling price of Xiaomi’s devices fell 8% in 2015 from the year before, while Huawei and Apple both saw strong increases in their handset selling prices, IDC found.
Ian Fogg, head of mobile for consulting firm IHS Technology, said that while the new handset was an attractive, innovative product that will fare well, Xiaomi needed to urgently address its patent question to sustain the global, long-term growth that it is seeking.
Without that, Mr. Fogg said, “at best, it can deliver a few one-off hits.” As it does so, Mr. Fogg adds, “Other smartphone makers must continue to look over their shoulder, even if Mi 5’s official availability remains limited to a handful of countries.”