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Huawei and Xiaomi: Charting the future of IoT

Posted: 01 Jun 2015 ?? ?Print Version ?Bookmark and Share

Keywords:start-up? B2B? B2C? wearables? smartphone?

5. Distribution channels vs Direct to consumers

In getting into the smartphone business, Huawei had to pay costly price in learning how to work with distribution/retail channels in the consumer market. For Huawei who grew up in the B2B business, this B2C stuff was all new. Yang told us "channels almost destroyed us."

In contrast, Xiaomi, who was also a newcomer to the smartphone business five years ago, figured out a way to totally bypass the intricacies of traditional distribution channels. They developed a strategy, from the very beginning, in selling their products directly to consumers via their own online platform. Further, they created a huge group of followers online.

Xiaomi's success, however, did not escape the notice of Huawei. Influenced by Xiaomi, Huawei caught on to the importance of creating "fans" for Huawei products and the company is now offering a placeonlinefor users to feel a sense of community.

6. Ren Zhenghei vs Jun Lei

The two companies sit at opposite ends when it comes to their leaders.

Zhenghei and Lei

Ren Zhenghei (L) and Jun Lei (R)

Huawei's founder and CEO is Ren Zhengfei, a former engineer in the People's Liberation Army. He is known to be very secretive. One of his rare public appearances was earlier this year at the World Economic Forum in Davos, Switzerland.

In contrast, Xiaomi's Jun Lei is an open book. He is vocal and passionate, frequently featured in the media, while his performance on stage during Xiaomi product launches have been often compared to Apple's late CEO Steve Jobs.

7. Past vs Future

On the surface, Huawei appears to represent the past of the electronics industry, while Xiaomi seems more futuristic.

There might be some truth to this analysis. In the pursuit of getting everything connected, using a business model that doesn't leverage the openness of the Internet doesn't make sense.

But the expansion of the IoT market, if it happens, will probably require elements represented by both Huaweiwhose sheer bigness translate into market muscleand Xiaomi, whose open-minded vision and youthful agility bespeak the high hopes of IoT.

- Junko Yoshida
??EE Times U.S.


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