Remember when Samsung was the new Apple? Well, that little bit of wishful thinking has run its current course, and now it's time for the next "new Apple." It's a company called Xiaomi, and you may have seen all kinds of coverage on the company's new (supposed) iPhone-killer, the Xiaomi Mi Note.
This device is a sleek beauty with specs that beat many of the specs in the iPhone 6 Plus. And it's cheap, at roughly $370 in China. The iPhone 6 Plus is roughly a grand.
Here's a promo video for the device:
Like most of Xiaomi's smartphones, the Mi Note is a great looking device. It's one of the best looking Android phablets on the market at any price, let alone the dirt cheap price point Xiaomi charges.
But make no mistake about it. It's no iPhone-killer, and Xiaomi itself is no Apple. Xiaomi might be a new Samsung, but I have my doubts about even that. Allow me to explain.
Xiaomi got its start in the Smartphone business (like Samsung) aping Apple. The CEO of the company held press events modeled after Apple's, and he dressed like Steve Jobs. The company's early products often (though not always) looked like Apple's iPhones, enough so to get Sir Jony Ive riled up.
In response to a question about this so-called "Apple of China" at the Vanity Fair Conference in October, 2014, Sir Jony said,
I'll stand a little bit harsh, I don’t see it as flattery. When you’re doing something for the first time, you don’t know it’s gonna work, you spend 7 or 8 years working on something, and then it’s copied. I think it is really straightforward. It is theft and it is lazy. I don’t think it is OK at all.
In a word, Sir Jony: word.
Well, two words. Theft and lazy. Those two words cut to the chase. When you're stealing—or at least borrowing—from your betters, you're not an Apple. When you're lazy—when you don't go through the hard steps necessary to invent stuff on your own—you're no Apple.
You're more like a Samsung.
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Page 2 - Apples and Oranges
But even there, Xiaomi comes up short. All of the issues between Apple and Samsung and their epic patent war aside, Samsung pays royalties on standards essential patents (SEPs). Of course, Samsung has a vested stake in the SEP system because it owns so many SEPs, but the point is that Xiaomi doesn't yet pay.
That has flown in China, but it's already having problem in other markets. The company got several models thrown out of India, for instance, because it wasn't licensing a variety of patents necessary to be an accredited player in the smartphone market. Things are only going to get worse for Xiaomi as it tries to expand.
Xiaomi's prices (in China) are cheap not because it's magically better at designing and copying than everyone else, but because it's not paying all of its betters who make smartphones possible. I'm not talking about Apple, here, either. I'm talking about the work-a-day industry stalwarts who developed the technologies that become part of wireless standards.
China's IP laws are lax, especially when it's non-Chinese IP. Outside of China, the Samsungs and Ericcsens and Qualcomms and Nokias of the world get paid for their work.
OK, there's also the fact that, like Amazon, Xiaomi doesn't care about margins, but I think that's less important than Xiaomi's IP practices.
Xiaomi is playing a low-margin bottom feeder game of copying where it can, coasting on the rest of the industry where it can, and slapping retreads on a production jalopy and pretending its an Apple Edition Rolls Royce. Heck, Xiaomi doesn't even make its own operating the system. The company's devices run on Android.
That's not how to be an Apple, and the only people claiming otherwise have no understanding whatsoever of how Apple does what it does. To these folks, there's little difference between making something that looks like an Apple device and Apple making the real deal. Such people can't help it. It takes a bit of effort and some contemplation to realize why Apple is unlike any other company out there.
Reality Bites
Xiaomi's reality is that in order to enter most western markets the company is going to have to pony up to the SEP table. That means higher prices on its devices, eroding the company's perceived value outside of China. Again, that doesn't make Xiaomi the new Apple.
Companies like Xiaomi are little more than another flavor of every other Android maker out there. Each new player does something better than the others, gains a little share, maybe makes a little profit for a while, and then is usurped by the next. In the meantime, Apple keeps on truckin'.
Xiaomi can take share away from HTC, Samsung, LG, and every other Android Tom, Dick, and Harry, but that doesn't make it a threat to Apple. As Forbes's Tim Worstall put it, Xiaomi isn't even in the same business as Apple.
One more thing: I said up front that the Xiaomi Mi Note looks good and has impressive specs. Both are true. But many Apple competitors have had some specs that are better than Apple's at one time or another, at least on paper. Some win here, some win there, but where Apple competes—at the high end of the market—it's about the experience. It's about how the device works as a whole.
There's nothing about the Xiaomi Mi Note that will change this part of the equation.
Xiaomi will enjoy success in China, as long as success isn't measured in profits. If it cleans up its IP act, it will enjoy (some) success in the rest of the world, too. But that success will come at Samsung's expense, not Apple's.
Image courtesy of Shutterstock.