Although Xiaomi was not able to reach its sales target last year, it has overtaken its smartphone rivals. This Chinese company sold more smartphones than its nearest competitors, Apple and Samsung.
The original objective of this Chinese tech giant was to sell 100 million smartphones last year, but lowered this target to 80 million when things got difficult. Even then, by the end of 2015, Xiaomi was only able to sell 70 million units.
But despite the downgrading of its sales target, Xiaomi's rivals were nowhere near the sales figure it was able to achieve.
The entry of Xiaomi in the Chinese smartphone market has spelled difficulties to established smartphone manufacturers such as Apple and Samsung. Smartphone price is the key factor in driving smartphone sales in this country.
It is the main factor that affects smartphone market share. The most expensive units in China are Apple iPhones. Samsung is also more expensive than the ones built by Xiaomi.
In reality, it is not the number of units sold by a company that drives a company's revenues. Even if a company sells more units than the others, it doesn't mean that the actual revenue of that company is good.
With the entry of Xiaomi in the Chinese mobile phone market, Samsung and Apple felt the pressure even if they sold more units than before.
Lei Jun, Xiaomi CEO, stated that the company's core business strategy is not to sell more and more smartphones which is what Samsung and Apple are doing.
According to Jun, his company follows three core business competencies. First is e-commerce, second is contract with telecom operators, and third is sale of internet services such as games and so forth.
Another factor that influenced the market in buying Xiaomi's smartphones is the fact that this company has been subsidizing every phone it sells causing smartphone prices in this country to go down.