Xiaomi's founder Lei Jun responds to disputes haunting the company

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Photo/Liu Chunshan (NBD)

Feb. 21 (NBD) – Chinese smartphone maker Xiaomi unfolded its new flagship model Mi9 on Wednesday with the price going up substantially to 3,000 yuan (446.3 U.S. dollars).

Since Xiaomi has long been labeled with "cost-effective", the new price caught much public attention though the company previously disclosed the markup for several times.

At the same time, Xiaomi has been tangled with disputes since the beginning of 2019 over its falling-out with flexible electronics manufacturer Royole, the downturn of its phone shipment volume for the fourth quarter of 2018 in China, as well as the reform of interior management system.

After the press conference, Xiaomi's founder Lei Jun accepted an interview with media including NBD, answering questions that the public are concerned about.

1.Why does Xiaomi resort to a price hike?

Xiaomi model price were raised to 2,500 yuan (371.9 U.S. dollars) last year after being priced at 1,999 yuan (29.6 U.S. dollars) for years, and this time Xiaomi increases the price by at least 500 yuan (74.4 U.S. dollars). As a result, the public doubt whether the phone manufacturer will remain committed to a "cost-effective" course.

Being cost-effective is not equivalent to being cheap, said Lei Jun, and the price rise is partly a way to shake off the restrictions from the previous tag. A price hike enables Xiaomi to produce better-quality products and brings more capitals to R&D, he additionally explained.

2.Did Xiaomi take part in the R&D of foldable screens?

Last month, Xiaomi's co-founder and president Lin Bin showcased on Weibo a phone model with double foldable screens which Xiaomi is developing, declaring it is the first smartphone with double foldale screens.

However, Jason Fan, vice president of Royole accused Xiaomi of being "disrespectable" as the latter only bought flexible displays that can't be massed produced from other companies.

Lei Jun responded that Xiaomi indeed didn't produce the foldable screens but has applied the screens into a smartphone, which also requires much hard work. The model with double foldable screens is absolutely launched for the first time by Xiaomi, he emphasized.

Lei Jun also admitted smartphones with foldable displays are not suitable for mass production now since the phone battery life is not long enough.

3.Does Xiaomi encounter a downturn in the domestic market?

Statistics from IDC shows the shipment of Xiaomi in China registered a year-on-year decline of 34.9 percent for the fourth quarter of last year, and the sales volume of the year 2018 in the country decreased by 6 percent. 

As a contrast, Xiaomi recorded an increase of 32.2 percent in terms of global shipment last year, ranking fourth globally in terms of market share.

Lei Jun didn't comment on the fluctuation in China, saying it's hard to tell as Xiaomi hasn't announced the financial report, and he focused on the success in India, noting the third market for expansion will be ASEAN countries with Indonesia as the core. He also revealed Xiaomi has entered Africa and will make foray into Europe this year.

4.Does Xiaomi bid farewell to flat organization?

Over the years, Internet startups prioritized the flat management structure. But recent reports said Xiaomi has reformed its employee appraisal system by introducing key performance indicator.

Lun Jun replied the company still upholds the orignial management system. But its human resource division is now building a mechanism for rating the talents, aiming to improve the talent training program and Xiaomi will pour tremendous capitals to train leaders this year, he added.

 

Email: wenqiao@nbd.com.cn