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Its probably something to do with their revenue growth. While they have razor thin margins, its very easy to increase them once there's some kind of brand estab
by akhatri_aus 12y ago
Its probably something to do with their revenue growth. While they have razor thin margins, its very easy to increase them once there's some kind of brand established.
There's probably that bit of 'unknown' in there too, being that the company may be able to penetrate the Chinese market in creating a desirable product very well. The unknown being the Chinese market could be significantly larger than western markets in terms of how a single company could scale its sales in the single geographic location in such a way that history may not have seen before.
- steveax 12y agoVery easy to increase margins? Historically, this is very difficult for companies to do. What makes Xiaomi special in this aspect?
- akhatri_aus 12y agoIt's building recognisable brand, and that too a fairly good one. Historically it's been quite easy for companies that do this to raise margins. This is a company barely 4 years old and quite nearly a household name in asian countries. Additionally when manufacturing electronics, input components decrease in price so there is a natural tendency for their margins to increase even if they keep their pricing consistent.
- Giulalbez 12y agoXiaomi recently bought large stakes in chinese "youtubes" companies, YiQiYi and youku, it seems those companies are investing in creating their own TV shows and stuff, and big brands are advertising on the videos people in China already watch on those sites. The quality of the advertisings increased drasticcaly recently, with even big international brands advertising on them. Maybe someday phones will be like video-game consoles, where they loose money selling the hardware to make money on apps or services.