China-US 5G War: Xiaomi To Launch 10 5G Phones By 2020

Waning domestic demand for its bevy of 4G smartphones has forced Xiaomi Corporation, China's leading smartphone maker and the world's fourth most valuable tech start-up, to announce ambitious plans to launch up to 10 5G phone models, all by 2020.

Xiaomi will take a huge hit from downplaying its line of cheap 4G phones in favor of more expensive 5G models, but CEO Lei Jun says his company has no choice but to travel the 5G route.

"People in the industry fear that next year 4G models won’t sell," according to Lei. "This is a step you have no choice but to take. So we hope that operators can speed up their expansion of 5G base stations."

In September, Xiaomi launched its first 5G phone, the Xiaomi Mi 9 Pro, in China to surprising success. The Mi 9 Pro is Xiaomi's first 5G-enabled phone for the Chinese market. It features a 6.39 inch display and full HD+ 1080 x 2340 resolution. It's powered by a Qualcomm Snapdragon 855+ SOC (system-on-a-chip) and carries an Adreno 640 GPU.

Lei said demand for this phone exceeded the company’s expectations and led to product shortages. He admitted the Mi 9 Pro's positive market reception goaded Xiaomi into launching 5G models for the high, middle, and low-end price tiers. All these models will debut in 2020, an ambitious schedule some analysts doubt Xiaomi can pull off given the disruption to its supply chain caused by the U.S.-China trade war.

Lei spoke at the World Internet conference in the historic Chinese town of Wuzhen in Zhejiang province. Wuzhen has been the permanent host of the World Internet Conference since 2014.

Xiaomi's market leading status has kept shriveling, however. The company controlled 11.8% of China’s smartphone market, down from 13.9% year-on-year, according to Canalys, a global tech market analysis firm.

Xiaomi, however, isn't alone in its fall from grace. All the other top Chinese smartphone brands are reporting shrinking sales volumes as consumers patronize Huawei smartphones. Huawei's smartphone boost is being driven, in part, by a surge in patriotism for a company oppressed by the Trump administration. Huawei is still on the U.S. tech blacklist.

Xiaomi also has to contend with the resulting steady drop in its share price over the past year as China’s smartphone market grows tougher and more competitive. In September, Xiaomi announced it plans a $1.5 billion share buyback to increase equity value and make itself more attractive to investors.

While domestic 4G demand is irretrievably on the decline, demand for this smartphone in Europe is booming. Xiaomi is a newcomer to Europe but its cheap phones are selling.

Its market share in Europe during the second quarter of 2019 rose to a high 9.6% compared to only 6.5% year-on-year. This success makes Xiaomi one of the fastest growing phone brands in Europe this year.