Chinese Smartphone Maker Xiaomi to Enter US Market

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Company representatives have made official a move by Chinese smartphone maker Xiaomi to begin selling its phones in the U.S. market. According to a report at the People’s Daily, the company has announced that it has plans to begin selling phones in the United States “sometime in October.”

That’s about one month after Apple Inc. (NASDAQ: AAPL) announces its latest and greatest iPhone. Xiaomi’s U.S. launch may be bad news for Apple, if not in the domestic market certainly in the fast-growing Asian market.

Xiaomi’s top-of-the-line Mi 5 smartphone just dropped its price for customers in India from about $375 to around $345. The phone sells for about $427 in China. The iPhone 6s sells for more than $800 in China and iPhone sales in India are anemic because the most popular phones in the country sell for less than $150.

Apple sold just 800,000 phones in India in the second quarter of this year and the company’s iOS market share dropped from 4.5% a year ago to 2.4%. Alphabet Inc.’s (NASDAQ: GOOGL) Android operating system owns more than 97% of India’s market, according to researchers at Strategy Analytics.

In China, Apple’s market share dropped from 9.2% in the second quarter of 2015 to 6.7% and volume shipments fell from 9.7 million to 7.3 million units.

Xiaomi’s market share in China also dropped from 18.6% a year ago to 11.7%, and the company is now in fourth place among smartphone makers behind Huawei (17.5% share), Oppo (13.9% share) and Vivo (11.9% share).

Strategy Analytics noted that nearly one in every three smartphones sold globally (340.4 million units) in the second quarter were sold in China. India accounted for 31 million units in the second quarter. Apple’s share of global shipments dropped from 14% to 12% in the quarter.

Smartphone penetration in the United States has reached nearly 80%, and Apple owns about 43% of the U.S. market, estimated at 207 million units in 2016. Is it likely that Xiaomi is going to have a big negative effect on U.S. iPhone users? Probably not.

The latest report from the American Customer Satisfaction Index showed that 81% of iPhone owners are satisfied with their Apple products. As we noted in our new review of top customer service companies, more than 83% of iPhone owners say that their next smartphone purchase will be another iPhone. It’s hard to see how a Xiaomi device is going to change that.