Xiaomi splits POCO into an independent company, setting its own strategy, independent of the parent company

The move comes months after a senior POCO executive, Jai Mani, once worked at Google, and several other core founders left the sub-brand. Xiaomi claims that POCO F1, the only smartphone ever launched under the POCO brand, is a “successful” device. POCO F1 costs $ 300 and is present in 50 markets around the world.

Manu Kumar Jain, Xiaomi’s Vice President, said POCO has made a name for itself in a short span of time.

” POCO F1 is an extremely popular phone among many user groups, and is still a leading product in its segment even after entering 2020. We realize it is time for POCO to self activities, which is why we are pleased to announce that POCO will split into an independent brand. “

A Xiaomi spokesperson confirmed that POCO is now an independent company, but did not share further how the company will be organized.

Xiaomi once established the POCO brand to introduce high-end smartphones that compete directly with OnePlus and Samsung flagship smartphones. In an interview in 2018, Alvin Tse, director of POCO, and Mani, said they were developing a few smartphone models and were thinking about other electronics products as well.

At that time, the company had 300 employees working at POCO, and they ” shared resources” with the parent company.

” We hope to meet the new needs of consumers … If we can bring them something attractive enough at a price they have never imagined before, a lot of people will be interested in enjoying the cutting edge technology “- Tse said.

However, no one knows why Xiaomi never launched the next smartphone under the POCO brand, even though it claims the first smartphone has been as successful as it should.

POCO F1

Ever since the launch of the POCO F1, Xiaomi – which is famous for producing affordable and mid-range smartphones – has launched a range of high-end smartphones, like the K20 Pro. Earlier this week, Xiaomi continued to announce plans to launch a series of new high-end smartphones in India, its most important market, and also where it holds the No. 1 position.

” The new products will be in many segments, which we think will help ‘Mi’ maintain consumer interest in 2020. We also plan to bring high-end smartphones from the Mi line, which reaping record profits since entering the market “- Raghu Reddy, segment director at Xiaomi India, said.

It seems that is an explanation. According to the analysis, Chinese smartphone manufacturers have established many sub-brands over the years to launch models that are different from the brand image of their own company. Xiaomi needs POCO because its Mi and Redmi smartphone brands are familiar to users in the mid-range and affordable segment. But as the company enters the high-end market and gets attention, sub-brands may not be the best marketing tool.

Tarun Pathak, a senior analyst at research firm Counterpoint, said the move would allow the Mi brand to rise into the high-end smartphone segment as the company began to seriously consider 5G technology. .

” POCO can continue to make flagship devices, but at a lower price and with 4G. The 5G strategy requires a high-end smartphone that carries a consistent message in every geography … and Mi better respond to that than POCO “- he said.

In addition, Xiaomi has bigger things to consider.

The Chinese electronics giant is struggling to expand its Internet services business, in a bid to reduce its reliance on electronic products. XIaomi’s third quarter revenue reached US $ 7.65 billion, up 3.3% from US $ 7.39 billion in the second quarter and 5.5% from the third quarter of 2018.

More importantly, Xiaomi’s smartphone revenue was $ 4.6 billion in the third quarter of last year, down 7.8% from the same period last year. The company sold only 32.1 million smartphones during this period, and blamed the decline in the Chinese smartphone market.

Reference: TechCrunch