As competition is tightening in the crowded smartphone market, OEMs are looking to expand revenue streams by focusing on smart ecosystem devices. At MWC 2024, along with its Xiaomi 14 and Xiaomi 14 Ultra smartphones that are co-engineered with Leica, Xiaomi showcased its first electric car, the SU7, while also highlighting its AI efforts. Jan Stryjak, Associate Director at Counterpoint Research, met with TJ Walton, Senior Product Marketing Manager at Xiaomi to discuss the company's exciting partnership with Leica, its AI vision, and more.

The Interview

Key takeaways from the discussion:

Xiaomi and Leica Co-engineering:

• Engineers from both brands work together on hardware and software aspects of smartphone imaging.
• Miniaturizing and integrating Leica’s optics into Xiaomi smartphone is a key focus.
• Beyond lenses, the partnership involves developing algorithms for optical and photo tuning.
• The current Leica partnership is exclusive to flagship Xiaomi smartphones.

AI as a Differentiator:

• Xiaomi is looking to create an AI-powered ecosystem across its entire product line, and not just a single device.
• The company announced its “Human x Car x Home” smart ecosystem powered by HyperOS.
• The aim is to allow users to leverage AI seamlessly across the ecosystem devices.

Analyst Takeaways:

• Xiaomi was one of the few smartphone OEMs that launched smartphones at MWC 2024, keen to showcase its premium credentials. It has been attempting to break into the premium segment in Europe for a few years now but has so far not been hugely successful as the bulk of its sales still comes from its lower-end Redmi sub-brand.
• Xiaomi’s focus at the launch of its 14 series was its partnership with photography heavyweight Leica, and the results are certainly impressive. The portraits captured by the phone’s camera were truly stunning (arguably one of the best of any smartphone available today), and the introduction of the Ultra variant to the European market for the first time positions Xiaomi as one of the best smartphone camera OEMs in the region.
• The question is whether this is enough to transform consumers’ perception of Xiaomi to that of a premium brand. Xiaomi’s strength lies in its ecosystem, and the promise of a seamless experience across all its products is a big draw. But Xiaomi’s ecosystem is still small in Europe. If Xiaomi can grow this side of its business, it has the opportunity to become the “Apple of Android” and compete more with the likes of Samsung, and also a resurgent HONOR, which has big ambitions in Europe.