The Xiaomi phone, which has recently begun shipping to pre-order customers, is finally beginning to quench the market's thirst with the slogan "Dear friend, thank you for your patience."
According to reports, the number of pre-ordered Xiaomi phones is approximately 300,000 units. According to Xiaomi’s retail version announcement in mid-October, the first 12,000 customers who made advance reservations would be among the first to receive their phones in October, while the delivery time for the first 37,000 customers will be extended until November 9th. Customers who did not pre-order are likely to face the awkward situation of not being able to get a Xiaomi phone for several months.
"Some of the online claims about large-scale resale of Xiaomi phone preorder vouchers and possible supply shortages are likely self-hype. A supply requirement of 300,000 units is not very high, and it is unlikely that Inpad, Xiaomi's supplier, cannot reach the corresponding production capacity," Li Yi, the executive deputy chairman and secretary-general of China Mobile Internet Industry Alliance, told The Daily Economic News. "In the mobile phone industry, unless it is a product like Apple's iPhone, other brands rarely experience such supply-demand imbalance."
Xiaomi fans start selling reservation numbers
According to the retail version announcement released by Xiaomi on November 11th, "Xiaomi phones will begin sales to pre-ordered users on October 20th. In the first week after the 20th, there will be 1,000 units per day; in the second week, 2,000 units per day; and in the third week, 3,000 units per day. Subsequent shipping plans will be announced later. After all 300,000 pre-ordered users have received their shipments, we will then open sales to all users via our online communication tools."
For new brands, it is challenging to ensure timely supplies for their first products, and the market quickly responded. On websites like Taobao, more sellers are openly listing Xiaomi phone reservation numbers for sale, with prices ranging from hundreds to thousands of yuan. Some consumers expressed that waiting for months to receive their orders could mean they might as well buy other similar alternative products during this period.
Regarding the current issue of "supply tension," Lei Jun once stated publicly that Xiaomi phones use a large number of high-end custom components, making the production process more complex than imagined, with many uncontrollable factors involved. He kindly asked for everyone's understanding. According to Tencent Technology's report on October 20th, Vice President of Xiaomi's marketing department, Li Wanqiang, responded to the supply issues saying, "Hardware production involves a gradual increase in capacity. Xiaomi will gradually increase the shipment volume under the premise of ensuring quality, distribution, and after-sales service, aiming to meet the needs of Xiaomi phone pre-ordered users as soon as possible."
Reporters from The Daily Economic News repeatedly contacted Xiaomi Phone Company regarding the shortage issue, but as of press time, Xiaomi Phone Company has not accepted interviews.
Risks of inability to deliver on time
Xiaomi's launch of a high-end configuration smartphone priced below 2,000 RMB shows great ambition. "Xiaomi's promotion of high cost-performance, especially its chip speed, has captivated many consumers. However, industry insiders know that this chip has been sitting in the laboratories of competitors like ZTE and Huawei for some time. The reason these competing companies haven't rushed to apply it in new models like Xiaomi is because they consider the need for compatibility testing of the phone chips and other key components. Any problems arising could impact future sales and long-term brand building," Li Yi said.
Wang Ningyuan, IT industry researcher at China Investment Consulting, pointed out to The Daily Economic News: "The strategy of high-end configuration at mid-to-low-end prices has become a highlight for Xiaomi phones and an important reason for its popular pre-orders. Xiaomi's configurations indeed belong to the high-end category, approaching the top level of current smartphone configurations. Entering the market with high-cost performance products is also a process of brand establishment and promotion." However, the supply cannot keep up with sales. Wang Ningyuan said, "Xiaomi conducted product pre-orders and payments through online transactions on its website, which is equivalent to signing a contract between buyers and sellers, thus having legal effect. Therefore, failure to deliver on time should bear corresponding legal risks."
Li Yi believes that whether it is self-hype or not, delaying shipping times is a very unprofessional behavior lacking contractual spirit. Li Yi believes, "Although Lei Jun has been compared by some media as 'Steve Jobs' Chinese disciple,' Jobs' Apple product launches are more like concerts, meaning that no matter what means are used, the ultimate goal is always profit-making business objectives. So far, Lei Jun's operation of Xiaomi phones resembles more of a karaoke session, where the final profitability remains uncertain."
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