Absolutely there is no doubt Xiaomi is currently working on its own processor for smartphones. This simply means Xiaomi wants to stand out in the high-competitive domestic market and it also has ambitions to join the marathon of the world’s top mobile phone manufacturers. This is not the first case when Chinese companies step up their efforts to develop their own technologies to take the lead. As you should know, Huawei has its own chip series known as the Kirin, and look where the company is now. Xiaomi will launch its own processor within a month, and it will be the second manufacturer with in-house made chips after Huawei. Let’s see how the Pinecone will change the situation and what foreign media think about it.
Sean Yang, Research Director at TrendForce said ‘A phone maker can only reach the pinnacle of user experience when optimizing the integration of hardware and software on its own’. Thus if a smartphone maker wants to get a step forward it should develop its own hardware and software. Otherwise it will rely on suppliers as the case related with Qualcomm and Xiaomi Mi 6.
Making its own chips will play a big role in another game. India is the second biggest market for Xiaomi after China. But it couldn’t sell phones not packed with Qualcomm processors due to patent dispute. So launching Pinecone will help the company to enlarge its market share in India. The recent researches showcase Chinese brands have gained momentum in Q4, 2016 reaching 46%. Many can think Xiaomi is not the only Chinese smartphone maker presented in this market, but another research data provided by AnTuTu showed the Xiaomi Redmi Note 3 is the most popular smartphone in India occupying about 20% of the market. We can talk about Xiaomi’s popularity in India for hours, but let’s stop and write down Xiaomi is the most beloved Chinese smartphone brand in this region.
The question is whether Xiaomi will become more competitive to the top brands like Apple and Samsung once its own chips is launched. As you know, both manufacturers have develop their own chips and this is one of the key factors why they have no equals in the market. Experience shows those manufacturers that have developed their own chips like Apple, Samsung and Huawei are the leaders. As for Xiaomi, it led the Chinese smartphone market in 2015, but last year it fell to fifth behind Oppo, Vivo, Apple, and Huawei. So this company has to do its best to get back its crown. On the other hand, this plan is too risky. Mark Li, an analyst at Bernstein Research thins so ‘The resources required to develop competitive mobile chips are high.’ But seems this doesn’t scare Xiaomi.
Beijing Pinecone Electronics, a new Xiaomi-linked private entity paid $15 million to acquire mobile processor technology from Datang subsidiary Leadcore Technology Ltd. These companies have been planning to develop chips for mobile phones jointly. We haven’t heard much about anything actual till Q4, 2016. And now when an official website and verified social media account for the new chip company appeared, we have all reasons to think the launch of Pinecone is closer than you think.
Well, Chinese smartphones makers are increasing prices for their products after another. Xiaomi is no exception. So any manufacturer with long-term goals should insure itself from all kinds of fluctuations. In this sense, the Xiaomi’s self-developed chips may save the situation, but the question whether it can compete with top brands seems foggy. As Wang Yanhui, secretary-general of the Mobile China Alliance said Apple has its own operating system and Huawei has decades of experience making network equipment. So whether Xiaomi will join the top of smartphone makers is still disputable.
Inspired of WSJ
