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The Internet of Things, a new battlefield for smartphone brands

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Oppo, Vivo, Huawei, OnePLus… Almost all smartphone brands are betting on the Internet of Things to develop services and escape the trap of commoditization of hardware. Xiaomi stands out as a model in this strategy.

Xiaomi, the world’s fourth largest smartphone manufacturer behind Samsung, Huawei and Apple, launched a new range of products in the US/Europe which includes, in addition to smartphones, connected bracelets, wireless headphones, a curved video game monitor, an electric scooter and a USB TV stick. A diversity that illustrates its strategy of walking on two feet, one in smartphones, the other in the Internet of Things.

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Smart home access key

Oppo, Vivo, Huawei… All the other mobile brands have been following a similar strategy for one to two years. OnePlus and Realme are among the latest to take this path. The Internet of Things is seen as a new Eldorado, the key to entering the connected home and the way to develop services in order to escape the inevitable commoditization of hardware.

According to Flora Tang, an analyst at Counterpoint, Xiaomi stands out as a model in this transformation. Moreover, its CEO-founder Lei Jun presents his company, not as a smartphone manufacturer, but as an internet player. Xiaomi forms with Baidu, Alibaba and Tencent BATX, the Chinese counterpart of GAFA ( Google, Amazon, Facebook and Apple). It now has nearly 235 million objects connected to its Internet platform (excluding smartphones and PCs). A park that he tries to promote through various online services (music, video-on-demand, games, cooking recipes, etc.).

The Internet of Things, a new battlefield for smartphone brands© Xiaomi
The CEO-founder of Chinese Xiaomi presents his company, not as a smartphone manufacturer, but as an internet player.

Xiaomi, the world’s fourth largest smartphone manufacturer behind Samsung, Huawei and Apple, launched a new range of products in France which includes, in addition to smartphones, connected bracelets, wireless headphones, a curved video game monitor, an electric scooter and a USB TV stick. A diversity that illustrates its strategy of walking on two feet, one in smartphones, the other in the Internet of Things.

Smart home access key

Oppo, Vivo, Huawei… All the other mobile brands have been following a similar strategy for one to two years. OnePlus and Realme are among the latest to take this path. The Internet of Things is seen as a new Eldorado, the key to entering the connected home and the way to develop services in order to escape the inevitable commoditization of hardware.

According to Flora Tang, an analyst at Counterpoint, Xiaomi stands out as a model in this transformation. Moreover, its CEO-founder Lei Jun presents his company, not as a smartphone manufacturer, but as an internet player. Xiaomi forms with Baidu, Alibaba and Tencent BATX, the Chinese counterpart of GAFA ( Google, Amazon, Facebook and Apple). It now has nearly 235 million objects connected to its Internet platform (excluding smartphones and PCs). A park that he tries to promote through various online services (music, video-on-demand, games, cooking recipes, etc.).

A service model that is difficult to export

If smartphones represent 60% of its turnover in 2019, it is the activity of connected objects that shows the fastest growth: + 63% against 23% for smartphones and + 49% for internet services. It weighs 30% of total turnover in 2019, against 13% in 2015 according to Counterpoint.

Activity in services is still limited to around 10% of total income in 2019. Far from 23% at Apple. This is because its service model remains difficult to export outside of China.

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