Xiaomi Reduces Smartphone Range Following Acknowledgement of Errors in India

Xiaomi Corp. intends to prioritize the development of 5G smartphones and streamline its product range in India, as it aims to regain market dominance in its second-largest market, where it has faced tough competition from rivals like Samsung Electronics Co. from South Korea.

China’s Xiaomi dominated smartphones in India for years before regulatory headaches and an overly broad product portfolio — which it says confused customers — led to its decline. According to researcher IDC Corp., in the fourth quarter to March, Xiaomi ranked second in the Indian smartphone market behind Samsung, Oppo and Vivo.

India is one of the most competitive markets for the world’s biggest phone brands, and companies such as iPhone maker Apple Inc. are looking to boost sales in the planet’s most populous country. Xiaomi is investing in a gradual recovery, deepening its relationships with local partners and simplifying its product offering.

“Is this year number one? No, we are not,” Xiaomi India President Muralikrishnan B. told reporters at a press conference late last week. “These are long-term playoff games.”

Key changes like reducing smartphone launches, increasing customer experience and increasing sales through brick-and-mortar stores will help the company return to its earlier success, Muralikrishnan said.

In the past, the company launched “too many products, too many options,” he said. “To some extent, we were reacting to what the competition was doing.”

Xiaomi is also making other important changes in India, its most important market outside of China. Pushed by New Delhi, it is deepening local sourcing and handing over some of its smartphone assembly in India to homegrown Dixon Technologies India Ltd.

In order to curb costs, the company laid off up to 30 employees in June, and more job cuts are likely, the Economic Times newspaper reports. However, Muralikrishnan said that Xiaomi India has not let people go this year and will not do so.

“For efficiency and clarity of roles, you rebuild your organization whenever necessary to meet the needs of the strategy,” he said. “Now all the speculation about firing people – that’s something I categorically deny as untrue.”

Xiaomi will announce a new 5G smartphone on August 1 at a price of $200 to $250, marketing director Anuj Sharma said. The move is part of the company’s strategy to sell low-cost, locally assembled 5G models.