Report: Xiaomi expects losses in Apple battle

Chinese smartphone startup's president said it's not looking at profitability for next two to three years in order to attract high-end users from rivals such as Apple to its software, report says.
Written by Kevin Kwang, Contributor

China's smartphone vendor Xiaomi, which counts Singapore's Temasek Holdings as an investor, is prepared to suffer losses for the next two to three years as it looks to win customers over from Apple to its software.

In a Bloomberg report on Thursday, the company's president, Bin Lin, said that profitability is not at the top of the company's concerns for the next few years. He added that it will only start looking at profitability from software and services after it had established its user base.

To achieve its goals, Xiaomi will be offering a phone for China Telecom today, something which Cupertino has yet to do with its iPhone device, the report noted. ZDNet Asia's sister site CNET had earlier reported that China Telecom might offer iPhones as early as February or March this year.

The company has sold some one million phones online, and won an order from China Unicom for another million, according to Lin.

Hans Tung, who is a fund manager at Qiming Venture Partners, one of the company's six initial investors, also told Bloomberg: "Besides Apple, no one else has been able to do that in such a short span of time. It's a very auspicious start. We believe this team is innovative and fast-moving enough to turn out interesting things."

The Chinese startup's focus on the high-end smartphone market is a strategy that two analysts had earlier urged for the country's phone manufacturers. GfK's telecom analyst, Sun Kai, for one, told ZDNet Asia that for local companies to break into this market, they would need to improve their brand image, strengthen their ability to innovate and optimize distributional channels.

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