China's Xiaomi takes first step into U.S. market

The company will launch a phone accessory store later this year

The biggest Android smartphone maker most Americans have probably never heard of is taking its first step into the U.S. market.

Xiaomi, which in just four years has gone from nothing to leading the Chinese market, will launch a U.S. version of its online shopping site later this year but it won't sell the low-cost, high-spec phones for which the company has gained its reputation.

Instead, it will sell a selection of phone accessories like battery packs and headphones. That doesn't mean a U.S. launch of its phones has been ruled out, however.

"The amount of effort to bring [smartphones and tablets] to market is significant," said Hugo Barra, the one-time Google executive who is now vice president for international markets at Xiaomi in Beijing. Barra, who was speaking to reporters in San Francisco, noted the various certifications required to sell products in each country, the need to strike deals with carriers and organize customer support.

"It's an incredible amount of work and we have to move at the right pace," he said. "We're accelerating our entry by bringing simpler products."

While Barra wouldn't commit to if or when Xiaomi will launch hardware, it appears to be on the company's mind. Thursday's event was held to introduce reporters to company executives and give them a chance to see Xiaomi handsets, many probably for the first time. The company also handed out samples of its MiNote 2 smartphone to some reporters and said it was keen to hear what they thought of the phone.

In China, the company has become a favorite among local users by continually seeking suggestions and improvements for its version of the Android operating system. Users vote on what features are added and every Friday at 5 p.m. local time, an update is published. This week marks the 225th weekly update.

The features include the functional, such as software detection of spam calls (a big problem in China), the useful, like shortcuts to popular items on the McDonald's China online phone ordering system, and frivolous ones such as cartoon skins for the phone's user interface.

The company also makes its own hardware. It releases a new phone roughly once a year, emphasizing quality and low price -- a formula that enabled it to beat Samsung to take the biggest share of the Chinese market in late 2014.

The company's overseas ambitions have so far been confined to Asian nations where price-conscious consumers buy phones outright rather than through carrier subsidies, and the road hasn't always been smooth.

In India, Xiaomi is embroiled in a patent dispute with Ericsson over wireless technology. On Thursday when asked if patent concerns were delaying a U.S. market entry, co-founder and President Bin Lin spoke of the number of patents it holds but didn't directly answer the question.

The company attributes a lot of its success to the support from its users, who it calls "fans." Indeed, millions follow or support the company on social media and its message board buzzes with feedback and suggestions, but it remains to be seen if that formula can be translated to success in the U.S.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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Martyn Williams

IDG News Service
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