Source | www.wired.com : By DHIRAJ SINGH
A YEAR AGO, Chinese smartphone maker Xiaomi (sha-oh-me) had fallen from the world’s most valuable unicorn to a “unicorpse.” Sales plunged in 2016, pushing the company from first to fifth place among China’s smartphone makers. No firm had ever come back from a wound that severe in the trench warfare of the global smartphone business.
Today, Xiaomi is being called a “Chinese phoenix.” The company has grown so fast in the past year that research firm Strategy Analytics says Xiaomi could overtake Oppo, Huawei, and Apple in the next year to become the world’s second-largest smartphone vendor, behind Samsung. Executives are reportedly considering an IPO in 2018, which could be among the highest-valued ever.
The comeback has made Xiaomi a poster child for China’s entrepreneurial dynamism. More than 10,000 new businesses are started every day in China — that’s seven Chinese startups born each minute. In the US, by contrast, startup formation has fallen 36 percent in the last 10 years, to roughly 1,000 per day. No longer a nation of “copycats,” China today leads the US in key technology sectors such as mobile payments, and is increasingly competitive in advanced microchips, and artificial intelligence. Xiaomi is one of the best exemplars of this entrepreneurial vigor.
What accounts for the company’s unprecedented turnaround? Is Xiaomi’s renewed success sustainable, or will it wither under the relentless margin pressures of the phone business? And can Xiaomi do what no homegrown Chinese phone maker has done — successfully crack the US market?