Author(s): Paolo Pescatore
More developments are pushing the smart home mainstream.
In July, Xiaomi introduced a $13 fitness tracker called the Mi Band. It's a simpler product than other fitness bands on the market, but Xiaomi priced their wearable at a fraction of competing products. Xiaomi's strategy of selling products close to bill of materials has enabled it to quickly establish its brand in Asian markets. The company may now extend this keen pricing into the market for smart home products.
On Friday, Xiaomi unveiled several products for the connected home including a Mi-branded hub for controlling smart products in a household via use of a connected Mi plug. The company released few details about the products (including costs), but CCS Insight believes Xiaomi's pricing strategy will be consistent with its market disruptor role, undercutting competing products in order to gain share and users. We believe that Xiaomi's connected home products are initially intended for the Chinese market, but expect the company to introduce smart home products in countries across Asia in which it has already established its name and sales channels.
Xiaomi's home hub, the Mi Smart Remote Centre, works with its own products as well as devices from partner companies. This includes Yeelight, a Chinese brand of smart light bulbs with functions similar to those of the Philips Hue. Yeelight offers ZigBee, Wi-Fi and Bluetooth versions of its connected bulbs. Another partner-company product to be offered is the Ants Smart Webcam, a wide-angle HD camera with an embedded microphone and speaker for two-way video calls. Xiaomi is expected to begin selling these third-party products on its Web site as the company establishes its retail skills with its own products and those of partners.
Xiaomi is now using its brand to broaden its ecosystem and establish a virtual retail presence. Selling a connected, third-party smart bulb is reminiscent of the Apple–Philips partnership to sell Hue products, and we believe Xiaomi's latest moves are an indication of its longer-term strategy to build its brand and connected lifestyle image.