China's Xiaomi breaks into tablet market, launches low-price 4K TV

Xiaomi has been gaining popularity for selling Android phones at just above cost

Xiaomi's new Android tablet.

Xiaomi's new Android tablet.

After disrupting China's smartphone market, local vendor Xiaomi is looking to shake up the tablet space with a new low-price slate set to rival Apple's iPad mini.

"We hope Apple will feel some pressure," said Xiaomi CEO Lei Jun at a Thursday product unveiling.

The Chinese company has been gaining buzz for selling cutting edge Android smartphones at just above cost, which has translated into big sales and a growing fan base. Xiaomi is taking the same strategy with tablets, and unveiled an Android product starting at 1499 yuan (US$243).

The Xiaomi tablet has a 7.9-inch screen with a resolution of 2048 by 1536 pixels. It uses Nvidia's new Tegra K1 processor, a 2.2 GHz quad-core chip. There are two versions, with either 16GB or 64GB of internal storage, and both have a microSD card slot for up to 128GB of additional storage.

The 16GB version starts at 1499 yuan, while the 64GB model will go for 1699 yuan. In contrast, Apple's iPad mini starts for 2888 yuan in China.

"I believe the Xiaomi tablet will become the best Android tablet," Lei said at the event.

Xiaomi will send out beta versions of the tablet in June. However, Xiaomi is coming late to China's tablet space. Apple has reigned as the nation's market leader, and in the first quarter had a 43 percent share, according to research firm IDC. Samsung trailed in second with a 10 percent share, while homegrown PC maker Lenovo had 5 percent.

But Xiaomi is optimistic it can find the same success in tablets as it has in smartphones. After selling handsets for just over two years, the company has risen to become one of China's hottest tech vendors, gaining more market share in the country than Apple's iPhones.

While it is less focused on making profit, Xiaomi has largely relied on selling phones online and using word-of-mouth marketing to save on costs. The company's products also contain its own Android-based operating system, which is then updated each week using customer input. The business model has helped Xiaomi build up legions of fans who are ordering its smartphones in droves.

"The entire mobile industry is turning its neck around and saying 'Who is this guy disrupting everything?'" said Bryan Ma, an analyst with research firm IDC. "If they take the same formula and bring it to tablets, they stand to be good competition."

Although the Xiaomi business model might work for tablets, it may run up against more hurdles when it comes to televisions. On Thursday, the company unveiled the second generation of its smart TV. It has a 49-inch 4K screen with a resolution of 3840 by 2160 pixels and costs 3999 yuan (US$648).

TVs are not in such demand as smartphones in China, said Antonio Wang, an analyst with IDC. Nor are people accustomed to buying them online, he added.

But the bigger problem for Xiaomi is that 4K smart TVs in China are already on sale for similar prices. "Xiaomi won't have the same advantages in TVs as it did with selling phones," he said.

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