iPhone and Xiaomi sales have been tumbling in China

Choosing an iPhone over a Xiaomi Mi phone is a no-brainer for the better-off and brand-conscious. Increasingly, bargain-seeking Chinese consumers want neither. Sales of both have been tumbling in China. Apple blames a slowing economy and its steep prices… Xiaomi, however, wants to go premium. It recently said it might raise the price of handsets in its Mi range. Xiaomi is best-known for affordability, with some handsets priced under $150. The Chinese business, which floated at a $54 billion equity valuation last summer, aimed to sell phones to the masses at thin margins. Big profits were meant to come from selling internet services. More than 40 per cent of revenues now come from outside China… Xiaomi lacks Apple’s pricing muscle. In 2016, Xiaomi held top market share in China, which accounted for more than 70 per cent of its revenue. ZTE, Huawei, Oppo and Vivo have since undercut Xiaomi on value and through easier access via physical stores. China’s move to 5G this year will bring significant demand for new smartphones over the next few years. But Xiaomi’s premium plan is fraught with risk…Doubts about Xiaomi’s strategy when it came to market have proved well-founded. The shares have fallen 43 per cent from their peak shortly afterwards, and may fall further.