Xiaomi spin-off Redmi wants to own the budget phone market
Xiaomi launched a new brand of smartphones called Redmi for China’s cut-throat budget handset market. It’s taking on Huawei’s Honor and is aimed at developing markets around the world.
Smartphone brand Redmi burst on to the scene at the beginning of 2019. But it wasn’t an unfamiliar name – Redmi was actually a series of phones made by Xiaomi, the Chinese smartphone maker. And it used to be one of Xiaomi's most popular series.
The Redmi 1 was released in 2013 as a cheap handset with impressive specs. And it sold impressively, too: The first batch of 100,000 units sold out in 90 seconds.
So if Redmi was already popular, why did Xiaomi spin it off as an independent brand?
Xiaomi's CEO Lei Jun says this as a matter of focus. The Redmi brand focuses on value-for-money budget smartphones, and Xiaomi is focused on high-end devices.
And that makes sense: Honor, a budget sub-brand of Huawei, outsold Xiaomi in the third quarter of 2018. Honor also allows Huawei to focus on more high-end phones like the Mate series. Oppo are doing it too, with a sub-brand called Realme.
But it’s Huawei and Honor that Xiaomi seems to be targeting.
"Don't mind life and death, come at us if you can," Lei Jun told Huawei during the launch of its first smartphone under the newly independent brand, the Redmi Note 7.
Also in January, Redmi introduced Redmi Go, an entry-level phone running on Android Oreo (Go edition).
According to analysis from IDC, Redmi will continue to lead the way in emerging markets. Aside from China, Xiaomi’s products have been insanely popular in India (it’s the number one brand for smartphones) and the company is now moving in on Africa.
But the Redmi spinoff is not just about Redmi. Xiaomi has been under a lot of pressure after its listing in 2018 to earn more money. It’s not just that people in China are buying different phones, they are also buying less of them.
Xiaomi is now trying to shake off the image of a cheap phone maker, moving towards premium phones with higher margins. Xiaomi is said to be planning to push a number of phones under the Mi and Mi MIX labels in 2019.