Xiaomi, the world’s fourth largest smartphone manufacturer and a major client of Dehns, made two significant strategic announcements last week:
- An IPO on the Hong Kong Stock Exchange, seeking to raise c.$10bn (c.£7.3bn / c.€8.3bn)
- Sales of their smartphones will commence in the UK through a partnership with Hutchinson’s Three
Xiaomi’s business model is principally based around manufacturing smartphones similar to Apple products, and then selling them at low profit margin (often half the price of similar Apple products). They began by selling these products in China with great success, rapidly growing their market share before expanding into other markets such as India, where they are now the top selling smartphone brand ahead of brands such as Samsung and Apple.
Their approach led to a number of patent infringement threats and lawsuits by their main competitors which were seen as a way of trying to prevent Xiaomi from expanding and entering the western market. However, through the diligent work of their legal team and various legal IP advisors such as Dehns, Xiaomi entered the European market via Spain last year. They have now stated their plans to enter the UK market via their partnership with Hutchinson, selling their smartphones in the Three retail outlets across the UK, in addition to selling in other European markets such as Austria, Denmark and Sweden.
Xiaomi's entry into the European market (and soon into the US market) will not have gone unnoticed by their competitors. Similarly, Xiaomi will be aware of the fierce competition and IP disputes in these markets between Samsung, Apple, Nokia and Huawei among others, as I have reported previously. It would therefore not be unsurprising if the IP disputes Xiaomi have faced in China are replicated in western jurisdictions.
In addition to smartphones, Xiaomi also develop, manufacture and sell other smart domestic products and gadgets, and the further development of this side of the business could provide other challenges and opportunities for their IP.
With their stated growth plans and aspirations, Xiaomi certainly seems to be a force to be reckoned with, especially for the more established smartphone manufacturers who have dominated the western market in recent times. When they move into Apple’s domestic US market, there are certain to be interesting times ahead as all these large technology firms battle for supremacy, with IP being a key component in the potential outcome.
In the meantime, Dehns will continue to work with Xiaomi to help support, advise and implement their IP strategy.
Xiaomi is the top-selling smartphone brand in India ahead of Samsung and the fourth globally in the first quarter of 2018 behind Samsung, Apple and Huawei, according to the analysts IDC.