Xiaomi's Smartphones Are Dominating Apple's iPhone in China

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In just four short years Xiaomi has burst onto the Chinese scene with immense growth, and is now the most dominant player in the game. While you may never have heard of Xiaomi, it is now China's top smartphone maker with a 14% market share, according to a recent Canalys report . Its 15 million shipments during the second quarter represents growth of more than 200% over last year, meaning it has now surpassed peers for leadership in the world's most populous region. This success could lead to headaches for Apple

The Xiaomi difference
So, with this young company bursting onto the scene with such explosion, you might be wondering what's the Xiaomi difference? Well, many of its best-selling products are near-identical design spin-offs of Apple's iPhone and iPad. Specifically, Xiaomi's Mi 4 and MiPad look like the iPhone 5 and iPad Mini.


Source: TechCrunch

As many Chinese companies do, the external components of a service or device might mimic its U.S. counterpart, but the internals are different: Xiaomi's products include Android operating systems. Yet despite this noted difference, the key is that after years of Apple having no presence in China, consumers now have a choice between two models, either real or fake, that look remarkably similar.

Source: freewaresquad.com

Not to mention, Xiaomi sells its Mi 4 for just $320 while Apple's iPhone 5s and 5c models sell for $864 and $733, respectively, in China. In essence, this price disconnect might explain Xiaomi's success, and support the notion that the brand will remain strong in China for some years to come.

And here comes the iPhone 6
With that said, China is an important region for Apple, one where it grew 28% during its last quarter and created nearly $6 billion in revenue. Aside from China, Apple's growth has been mediocre as other regions of the world reach maturity, including the Americas, where it grew only 1% versus last year.

Source: MacRumors

Of course, there is the soon-to-launch iPhone 6, which is widely reported to come in two different screen sizes of 4.7 and 5.5 inches , likely created with China in mind, where large phone sizes are preferred. There are also countless rumors surrounding the iPhone 6 such as sapphire glass, curved design, and a thinner more circular iPad Air-like frame.

While we won't know the exact design until the iPhone 6's expected announcement on September 9 , Apple is most certain to see a boost in not only the Americas but also China with its latest addition to the iPhone family. However, the key component with China's copy-cat tendency is that it might not take long for Xiaomi to replicate that model, as reportedly the company already works very closely with Apple's Chinese manufacturers .

Foolish Thoughts
With Xiaomi growing so fast, Apple's celebration in China might be short-lived, and while stronger patent protection and copyright laws exist in the U.S., Apple might soon face an even bigger challenge of Xiaomi entering U.S. markets, much like Samsung did several years back. So far, Apple has managed to remain strong in the face of cheaper and lower quality smartphones, but facing its near equal, at least from a aesthetics perspective, might pose its greatest challenge yet, one where the outcome is unknown.

Leaked: Apple's next smart device (warning, it may shock you)
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The article Xiaomi's Smartphones Are Dominating Apple's iPhone in China originally appeared on Fool.com.

Brian Nichols owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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This article appears in: Investing , Stocks

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