Excerpts from the original article.
RISE AND FALL OF XIAOMI: WHAT DOES THIS ACTUALLY MEAN?
The mobile industry has been rapidly evolving since inception, trends came and went, technologies came and went, so did companies. Once mighty Nokia had to sell off its Hardware Business, BlackBerry is struggling to sell even a million units, HTC and Sony seem to have completely given up and now we have Xiaomi joining the league.
Back in 2014, Xiaomi received $1.1 Billion in funding and was valued at a whopping $45B while investors were aiming at valuation increasing two-fold to $100B. But, in two years, today Xiaomi is valued less than $4B. Obviously, multiple factors are responsible for the fall of Xiaomi, often dubbed as “Apple of the East”.
The calculation was that once Xiaomi launched its smartphones in western Europe and the United States, it would become a global player. In fact, Xiaomi has been doing a lot more than just smartphones, their portfolio includes Air Purifiers, Wearables, Mobile Accessories like Power Banks, Portable Speaker and Headphones. Due to this diversification, Xiaomi seems to have lost focus as to what it really want to do. Even LeEco has been slowly getting into multiple segments, but their aim of creating an ecosystem is clear and everything being researched is with respect to it.
However, the problem is that Xiaomi simply does not have the patent portfolio to enter these markets. Long accused of copying hardware and features of established players like Apple and Samsung, Xiaomi is completely unprepared to enter a more mature market, where it would immediately face a volley of patent lawsuits, stymieing any chance it has of establishing itself as a major player.
I’ve always felt that the amount of R&D you do is directly proportional to your sustainability.