Xiaomi To Build Retail Stores and Smartphone Chips – Bloomberg / WSJ (Feb 10, 2017)
There’s a certain irony in a company which was a pioneer in its use of online retail falling back on brick and mortar stores as a way to shore up its business, but that’s what Xiaomi appears to be doing. It apparently wants to build 1000 stores in the next three years – roughly twice as many as Apple has globally, and 25 times as many as Apple has in China, by way of context. That’s a huge investment at a time when Xiaomi seems to be struggling, but physical retail is a good fit for the ecosystem of devices Xiaomi sells including both its own and its ecosystem devices for the home. Building its own chips is another big investment, and one that will likely take years to pay off – though it might establish some independence from current suppliers Qualcomm and MediaTek in the short term, the quality likely won’t be there from day one, so it’ll be interesting to see which of Xiaomi’s devices run its own chips – I’m guessing it’ll start by replacing MediaTek’s and work up from there. But it takes years to get really good in smartphone chips, and without an acquisition of existing talent here, I’m skeptical Xiaomi will do well anytime soon. Though Huawei is the local exemplar of this strategy, Apple and Samsung are still the gold standard for the make-your-own-chips strategy, and they’ve both been at it for years.
via Bloomberg (retail) and WSJ (chips)
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