
Xiaomi's $45B Valuation Seen 'Unfeasible' as Growth Cools - pavornyoh
http://www.bloomberg.com/news/articles/2015-11-25/xiaomi-s-45-billion-valuation-seen-unfeasible-as-growth-cools
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guybrushT
The article doesn't dig into some important possible reasons why the growth
may be slowing down. When a company is shipping at a large scale (~80 million
devices a year), macro factors must be playing a role -- may be the # of
phones shipped in the Chinese market is lower this year than expected?, or
slowdown in consumer spending? or some other macro factor. The reason I say
this is because the thesis presented in the article ("No Loyalty") isn't well
substantiated. There are way too many counter anecdotes available where super
loyal 'mi-fans' (thats what the loyal fans of this company are called) have
stood in line for hours to purchase the latest phones (a la Apple).

Their growth has been quite phenomenal -- infact, they are probably the
fastest company to reach $1B in revenue _ever_ \-- which isn't a small feat.
But as size grows, doesn't growth inevitably slow down (for almost every
company)?

Also, as another commenter has pointed out, they really are a _internet of
things_ company, more than a smartphone company. Seeing them _just_ as a
smartphone is missing the big picture.

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howlingfantods
I think viewing Xiaomi purely based on its smartphone sales is a bit
shortsighted. I don't own a Xiaomi phone but I do have 3 Xiaomi air filters,
several smart plugs, wifi router, digital thermometer, digital scale, etc.
When I buy a new TV, it'll certainly be a Xiaomi TV along with a Xiaomi router
which allows me access to the Xiaomi streaming service. The stuff they're
doing with smart home devices is probably what's going to drive their
valuation in the future.

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Crito
They have horrible brand recognition in the US. To most American consumers,
they may as well be a no-name brand.

I think it is safe to say that you are an exception of sorts. You've
surrounded yourself with products from a company most people don't even know
exists.

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pavlov
Xiaomi doesn't make their products available to American consumers, so that's
not surprising.

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wemysh
I wonder where people buy Xiaomi devices. They are not on Amazon. We run a
large website about phones and sell other brands all day via affiliate
programs. But never were able to find one via which we can sell Xiaomi phones.

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dnlrn
Xiaomi only sells them in their online shop and only in specific regions like
China, Hong Kong, Malaysia, Singapore and I believe India. There are no
retailers of Xiaomi phones and everybody buys them online at their shop.

There are some grey market importers for other countries, but even those
originally have to buy them online at their shop in a country where Xiaomi
sells.

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wemysh
Ah, so they dont tackle the US at all? Why that? Surprising that I hear so
much about them regardless.

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jacobolus
My impression is that Xiaomi is unapologetic about copying other products
without licensing the associated patents &c., but is sticking to markets where
they won’t be sued for it. Samsung, which did the same thing, has been
embroiled in extremely expensive legal wrangling for years.

Moreover, most US phones are sold under the cheap-up-front-with-2-year
contract model, something Xiaomi doesn’t do as far as I know. Getting phones
sold through cell carriers takes a lot of wheeling and dealing. More
generally, scaling out to new countries takes lots of work on regulatory
compliance, advertising/sales, customer service, etc. which they might not be
ready to tackle.

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taksintikk
Is their management that terrible? As an outsider I would assume the opposite
for their valuation/potential. They make reasonably good quality stuff that
gets replaced almost annually.

