With cut throat pricing strategy, Xiaomi prepares to heighten competition in smart TV segment

After announcing the launch of Mi TV in India early this year, Chinese smartphone maker Xiaomi partnered homegrown consumer electronics contract manufacturer Dixon Technologies to make television sets in India. The deal was signed in June and also aimed to launch for the Make-in-India ‘Mi’ brand of televisions from August this year.

Two months down the line, the Chinese smartphone maker is going to expand its television range in India. The company is going to adopt the pricing policy as it has done for smartphones in India, which means that televisions sets will not exceeded a net profit of 5 per cent.

But, unlike the smartphone category, Xiaomi will sell its televisions sets through brick-and-mortar multi-brand stores as well apart from the exclusive Mi Home stores and online. With three screen sizes (2, 43 and 55 inches) under price range of Rs 14,000 to 45,000, Xiaomi TV will see huge demand.

The Make-in-India emphasis of the company is not limited to television production but includes other hardwares meant for smartphones and other devices. This month, Xiaomi’s key component suppliers, Holitech Technology announced to set up a plant with an investment of $200 million over three years.

It will locally produce camera modules, touchscreen panels, TFT (thin film transistors), flexible printed circuits and fingerprint modules exclusively for Xiaomi, starting January 2019.

The company plans to produce 50 million components each year. By the end of the third year, it plans to produce 100 million units of each component.

Industry experts termed the Xiaomi move as sensible one as it will allow the firm to have greater control and flexibility on the supply chain. The company is expecting $2 billion in revenue from India in supplies. Currently, Xiaomi has six manufacturing facilities for smartphones and one unit for power banks spread across Andhra Pradesh, Tamil Nadu and Noida (UP).

So far, Xiaomi has displayed its competence in smartphone category by outpacing incumbent Samsung on a couple of occasions. However, Samsung had reclaimed leadership position in quarter ending June. Interestingly, it sold out more phones than Xiaomi in sub 10,000 category which is considered to be company's core strength.

Meanwhile, OnePlus emerges as leader in premium smartphone category. Following a fierce competition from Samsung and OnePlus, Xiaomi requires to spread product line. And, it sees smart television market as next growth driver in India.

Will Xiaomi repeat same euphoria as it did with smartphone in early days? Let's wait and watch.

The development was first reported by ET.