Business / Tech

Chinese smartphone maker Xiaomi makes foray into Japanese market

by Kazuaki Nagata

Staff Writer

Xiaomi Corp., the world’s fourth-largest maker of smartphones, is entering the Japanese market, embarking on a quest to win the hearts of iPhone-loving Japanese consumers.

Though late in joining the game, the timing may end up working well for the Beijing-based firm known for producing cost-effective electronics, as the Japanese mobile phone market has been undergoing some changes due to regulations implemented in October that could be disadvantageous for high-priced premium handsets.

“Xiaomi is finally entering Japan,” Steven Wang, general manager of Xiaomi in East Asia, said during a news conference in Tokyo on Monday.

Xiaomi, which has entered more than 90 markets worldwide, said it started taking orders online Monday for the Mi Note 10 smartphone series, Xiaomi’s latest high-end model equipped with five camera lenses and a monstrous 108-megapixel image sensor. Shipments will start later this month.

The Mi Note 10 and the Mi Note 10 Pro will be priced at ¥52,800 and ¥64,800, respectively, the company said.

Other than online sales, Wang did not provide sales channel details, such as whether it plans to sell them via Japanese carriers.

Xiaomi has established itself as one of the leading smartphone brands globally in less than a decade since its inception in 2010.

According to market research firm IDC, Xiaomi’s global market share was 9.1 percent as of the third quarter of this year, while Samsung Electronics Co. held 21.8 percent, Huawei Technologies Co. 18.6 percent and Apple Inc. 13 percent.

But the Japanese market has a different power balance, as Apple’s iPhones are hugely popular here.

In the first half of fiscal 2019, Apple’s smartphone share in Japan overwhelmed rivals with 44.6 percent, followed by Sharp Corp.’s 12.3 percent and Samsung’s 10.2 percent.

Some market watchers say Xiaomi, founded and run by Lei Jun — called China’s Steve Jobs — may have a tough time winning the hearts of iPhone users in Japan.

Yet the timing may also provide Xiaomi a good chance to grab a piece of the pie, as Japan’s smartphone market has seen some drastic changes in recent months because of pressure from the government to reduce data usage fees by facilitating competition.

The government has made it mandatory for carriers to clearly separate data fees and handset prices to enable users to see what they are paying for. It also ordered carriers to slash cancellation fees on two-year contracts to ¥1,000 from around ¥9,500.

The new rules also cap handset discounts at ¥20,000 to avoid excessive price cuts going to only certain devices.

This is where Xiaomi apparently wants to swoop in with its cost-effective smartphones, as the Mi Note 10 models cost roughly half of the latest iPhone models.

“We think that our value-for-money business model can bring big changes to the Japanese market,” said Wang.

The firm declared last year that it will cap its net profit margin from hardware products to 5 percent. Wang said Xiaomi can still make a profit due to economies of scale in addition to its internet businesses.

Xiaomi will roll out some nonsmartphone products in Japan this month, as well, including a smart wearable device and a rice cooker, he said.