RANCHOS PALOS VERDES, Calif. -- When Xiaomi's Mi.com launches in the United States, UK, Germany and France next month, it won't feature a single Mi smartphone, but there will be a host of other products that will be far cheaper than anything you can buy in the U.S.
Speaking at the Re/Code's Code Conference, Xiaomi Global VP Hugo Barra showed off an eclectic collections of gadgets -- none of which were designed or built by Xiaomi -- that will go on sale next month. Among them is the $15 Mi Band, a fitness tracker that, according to Barra, already sells 1 million units a month in China.
Barra explained that Xiaomi actually only makes three products: smartphones, TVs and routers. For the rest of the gadgets, Xiaomi finds small startup companies funds them (35 so far) and then picks the best products to feature on Xiaomi.com. "We would not sell a product that we don't love," said Barra.
In addition to the Mi Band, Barra showed off $79.99 high-end headphones that Barra insisted compete directly with $300 models. They also have a 2 AMP smartphone charger that will sell for $9.99 (similar chargers might cost three times as much) and its own selfie stick, which Barra and Re/Code's Walt Mossberg used in what was a first for the conference.
The Xiaomi executive, however, could not offer a timeline for when Xiaomi's home-grown line of smartphones will make their way out of China and into the U.S. market (they do sell some handsets in India). The phones, like the Mi Note, are notable for their very Apple- and Samsung-like design and for their shockingly low prices. Barra said, for example, that the 5.7-inch, dual-SIM-card Mi Note, which runs a high-end Qualcomm Snapdragon 801 CPU, sells in China for $315 dollars with no contract.
Barra revealed that Xiaomi doesn't actually make money when it sells these devices. However, he noted that the lifecycle for many of its handsets is 18-to-24 months and, thanks to the steady drop of component prices, the margins improve over time. By the end of the cycle Xiaomi is making money on the smartphones. They actually will lower the price of some devices late in that cycle and still make money.
Xiaomi is just five years old, and Barra said the comapany still thinks of itself as a startup. On the other hand, it has already collected the devotion of millions of Chinese customers. The Xiaomi user forum has, he reported, 40 million members -- an impressive number for a company that does virtually all its sales and marketing online. The 450 physical locations it has throughout China are for service and support.
That sales and support structure is something that could, noted Barra, takes years to establish in the U.S., which is another way of saying that it may be a while before Xiaomi is competing head on with Apple and Samsung in the U.S.