Xiaomi Didn’t Get the Big Device Memo

Reveals Its New Mi 6 Flagship Phone

On Wednesday at an event in Beijing, Xiaomi unveiled its latest flagship smartphone, the Mi 6. Xiaomi added new features, raised the price but kept the phone’s display size the same as its predecessor, the Mi 5, despite market trends of bigger screens and smaller bezels.

Overall the Mi 6 is an impressive device: it runs Android 6.0, features Qualcomm’s Snapdragon 835 chipset, dual 12-megapixel cameras on the rear, an eight-megapixel front-facing camera and a stainless steel frame. Xiaomi claims the dual cameras help create high-quality pictures even at full zoom. The new device ships with 64GB or 128GB of on-board storage.

Xiaomi resisted market momentum by keeping the display size of its new flagship model the same. For example, Samsung’s flagship phone of 2016, the Galaxy S7, has a 5.1-inch display. Its successor, the S8, features a 5.8-inch “Infinity” display. In our view, Xiaomi needed to balance new features with the cost of materials and decided to concentrate on imaging and processing technology, potentially differentiating on size in an inevitable “Plus” variant.

The Mi 6 phone will begin shipping in China on 28 April at a starting price of 2,499 yuan (about $363), considerably more expensive than its predecessor, the Mi 5, which had a starting price of 1,999 yuan (about $290). The price difference reflects the fact that suppliers of key components, particularly displays and memory, have pricing power in their favour. Xiaomi’s loss of scale is also likely to have been a factor.

Xiaomi has made its past success a textbook example. It became a top-five global smartphone supplier within three years of entering the market through a strategy of innovative marketing, competitive pricing and piggybacking on current popular styles. Xiaomi’s first phone, the attractively priced Mi-1, resembled other products on the Chinese market, which were much desired but out of reach for many consumers.

Xiaomi has received criticism during the past year for failing to continue to grow. It has seen sales in its domestic market of China fall, thanks to pressure mainly from other Chinese rivals like Oppo and Vivo. Hedging its bets, Xiaomi tried to expand to other markets, but this proved complicated. There was always little doubt that its success couldn’t be replicated easily across many markets. Xiaomi can claim some success in India, but expansion to the West seems out of the near-term plan for now.