Hugo's exit could push Xiaomi back to China

A few days after Hugo Barra announced his exit from Xiaomi, the fourth quarter result produced for 2016 shows Xiaomi has lost grounds in its home market China to other domestic players, which worked to show their prominence in selling through retail stores.

Smartphone maker Oppo overtook Xiaomi in the fourth quarter as the leading smartphone supplier in China’s growing smartphone market, research firm Counterpoint said.

Counterpoint said in its report on January 27 that Oppo accounted for 18.3 per cent of smartphone sales in China in the October-December quarter, ahead of Xiaomi’s 9.9 per cent, dropping it from first to fourth among smartphone vendors in China.

Research Analyst MengMeng Zhang said, “Xiaomi, the most talked about vendor last year, slipped to fourth spot during the year as the demand for its smartphones declined 22 per cent annually.”

“The key reason for this decline was its rivals racing ahead with key features, innovation, bigger marketing budgets and wider online and offline distribution channel during the year,” Zhang added.

India, which has the world's second-highest number of mobile phone accounts after China, serves as the second-biggest market for Xiaomi outside China.

In his three and a half years of service in Xiaomi, Barra helped the company to boost devices sales in India.

Counterpoint’s Associate Director Tarun Pathak said, “Hugo Barra was surely the face of the company and very well connected with the MiFans,” his exit will “likely mark a short term impact especially in certain markets. He advised, “Xiaomi needs to tweak its strategy including offline push in India and investments in IP to scale in west.

“Also, it needs to keep an eye on growing segments like Artificial Intelligence, Retail presence, Software and services and others. All these needs more engineering, supply chain and R&D expertise than marketing expertise and Xiaomi needs to Pivot accordingly,” Pathak added.

Hugo Barra was not immediately available to comment.      

Barra had worked with Google as head of product management for Android. He was hired by the China’s technology firm Xiaomi where he worked as the global vice president to build Xiaomi’s oversees presence.

Barra will now be joining the social media giant Facebook as the vice president of the company’s virtual reality team.