Chinese Smartphone Leader Xiaomi Adds Special New Feature In Order To Enter US Market -- A Patent Hoard

from the I've-a-feeling-we're-not-in-Beijing-anymore dept

The smartphone sector is undergoing an upheaval at the moment, as Chinese manufacturers move up the global market share rankings. Already, the third, fourth and fifth places are occupied by Chinese companies: Huawei, Lenovo and Xiaomi. But it's the last of these that has emerged as the real star. Although Xiaomi was only founded in 2010, in 2014, the company sold 61 million phones, and hopes to sell 100 million in 2015. Much of that growth will come from outside China: Xiaomi has already started selling its products across Southeast Asia, especially in India, as well as in Mexico, Turkey, Russia and Brazil.

Now it is aiming to enter perhaps the toughest market of all: the US. But it knows that offering hugely-popular products at extremely competitive prices is not enough. If it wants to survive in the US -- never mind thrive -- there is one more thing that it must have, as this report in re/code explains:

Xiaomi international head Hugo Barra said on Thursday that the Chinese electronics company is looking to file more patents and strike more deals ahead of a launch into the U.S. market.

The move is essential if Xiaomi really wants to play in the U.S. and Europe, where intellectual property issues are taken seriously.



Xiaomi has already filed for 2,000 patents, Barra said in an interview with Bloomberg TV.

“Think of it as, like, a war chest of sorts,” Barra said, adding that the company is also systematically taking patent licenses, especially for standards-essential patents.
Well, "taking intellectual property issues" seriously is one way of putting it. You could also say that the US smartphone market has extremely high entry costs because of patent thickets, and that the only way to play there is to have your own patents that you can use as a bargaining chip with the other patent-holders. But it doesn't have to be this way. China's "gongkai" culture shows how rapid innovation can flourish in an environment where patents and copyright are largely ignored, and where every company builds on the work of others, and is built on in turn. And for those who think that the US approach is safer and easier to manage, it's worth considering the following comment in the re/code article:
Even if Xiaomi takes licenses for standards-essential patents from Ericsson and others, it still could face the type of legal action that Samsung faced from Apple.
In other words, companies that try to play strictly by US rules find out that the rules are not as clear-cut as they might seem. It will be interesting to see how Xiaomi fares in this strange new world, and whether the "war chest" it is busily acquiring is enough to protect it from the worst excesses of patent monopolies.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: china, patents, smartphones
Companies: xiaomi


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  • identicon
    Anonymous Coward, 24 Jul 2015 @ 2:30am

    IP is one of the biggest injustices of this time period.

    reply to this | link to this | view in chronology ]

  • identicon
    Valamis, 24 Jul 2015 @ 4:28am

    Well this gets really interesting. I think Xiaomi has the volumes to push the prices down and the quality in their phones to compete with Apple and Samsung. But how do people of USA react for 100% made in china trademark? Waiting to see what happens..

    reply to this | link to this | view in chronology ]

    • icon
      tqk (profile), 24 Jul 2015 @ 8:18am

      Re:

      But how do people of USA react for 100% made in china trademark?

      When I was a kid, "Made in Japan" and "Made in Hong Kong" were derisive insults, the sort of thing you saw on cheap CrackerJack toys. Ten years from now, China'll be the ones selling things like Acuras, top of the line electronics, and high end chronographs (assuming people still wear watches in ten years). They're already producing bullet trains that rival the best European offerings.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Jul 2015 @ 9:13am

      Re:

      The U.S. can always add an import tax like the one Obama added to imported tires thanks to tire companies that wish to make their money through lobbying and not competing. Now tires are more expensive. But I'm sure they'll try to find a way to spin it to say it's somehow good for consumers kinda like how the evil shills here attempt to spin limited taxicab medallions as being good for consumers.

      reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 24 Jul 2015 @ 3:51pm

      Re:

      After everything that's been revealed the past few years, they could probably use it as a selling point.

      "Made in China: The Chinese government may or may not have bugged our phones, but unless they intercepted the shipment, the NSA hasn't. Who do you trust more?"

      reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 24 Jul 2015 @ 6:51am

    If Xiaomi is growing like crazy it means they are doing at least a decent job in building products customers want. The most important and yet ignored question is: would Xiaomi go beyond its infancy if it was opened in the US in 2010? The answer is most obviously no. So where is the progress the patent system is promoting?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Jul 2015 @ 9:32am

    If the Chinese also offers phone service with their non-NSA doctored phones I might consider getting a cell phone again. Trust is not a given, and our government no longer has mine. Defend and uphold no longer has meaning for today's politicos.

    reply to this | link to this | view in chronology ]


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