Xiaomi’s Great Effort Before IPO

Xiaomi Mi 8 Explorer Edition via The Verge

Xiaomi is seeking IPO in Hongkong around July. Xiaomi hopes to raise at least $10 billion at a valuation of $100 billion. But its valuation is questioned by investors. The valuation would be more likely to start around $60 billion to $70 billion[1]. On Thursday, Xiaomi announced some products update including software and hardware, in order to show its chance to sustain its target valuation.

MIUI 10, a customized Android Oreo version. A great improvement in UI design involving AI and voice assistant. Mi 8, a 6.21-inch OLED full-screen smartphone. It also has a notch where houses a selfie camera, IR camera module and other sensors. IR camera module can help achieve 2D unlocking function. Mi 8 has an upgrade version Mi 8 Explorer Edition and downgrade version Mi 8 SE. Xiaomi also continues its effect in VR and wearable market. Mi VR is the Oculus Go Chinese version. Only the logo is changed. Mi band 3 keeps the same design style with a bigger OLED after 2 years.

#Xiaomi‘s Ambition
Xiaomi also shown its business mode named as Triathlon, hardware product, Internet service, and new retail. Xiaomi ecosystem includes 90 companies and more than 100 million devices connections by March 2018. Xiaomi said they had built the world’s biggest IoT platform. As its IPO file pointed that hardware is its important user portal, they don’t expect hardware product become the main source of profits. Xiao mi even gave a promise that their hardware comprehensive net rate never exceeds 5%. Extremely low price is a good tool to build a mass user base in China. However, it is also a great pressure to create profit from its user.

Xiaomi business mode via Xiaomi Press

Xiaomi achieved sales 66.8 billion yuan in 2015, 68.4 billion yuan in 2016 and 114.6 billion yuan in 2017. It’s a significant increase. However, it is doubtful whether it can continue such growth. Although Xiaomi try to expend its hardware product sales, its main income is from the smartphone. Smartphone contributed 80.4%, 71.3% and 70.3% of income respectively in 2015, 2016 and 2017. According to IDC data, 1Q18 Xiaomi Shipment volume is 28 million. It’s the fourth in the world smartphone market ranking in 1Q18. At least, it’s a good data to show its potential.

Xiaomi shipment in 1Q18 via IDC

#Product Check
Let’s focus on the Mi8 Explorer Edition features, an upgrade version of Mi 8 and check whether it can support Xiaomi’s sales this year.

First, it has a true 3D face recognition module. Like iPhone X’s Face ID, it uses 3D structured light technology. As the graph shows in the following, this is a code type 3D structured light. iPhone X uses speckle-type structure light. Their solution is initially from PrimeSense that Apple bought in 2013. PrimeSense is known for their cooperation with Microsoft of developing Kinect1. Finally, Apple successfully made the module small enough to house into the notch in 2017.

Xiaomi Face ID via Xiaomi press

The Explorer Edition is supposed to use the solution from Himax and Qualcomm. Qualcomm and Himax announced the joint cooperation in high-resolution 3D depth sensing solution in Aug 2017[2]. Himax provides Diffractive Optics Element/DOE, Wafer Level Optics/WLO, and structured light module key components. Qualcomm mainly provides 3D sensing associated software and experience in computer vision architecture and algorithm. This combination gives Android group quick route to 3D sensing solution. However, they have to use Qualcomm 845 chipset or latest one to achieve the function. Samsung and Huawei usually will not use Qualcomm chipset in their flagship. Also, the yield rate is also a concern of the 3D sensing solution in the smartphone. We hope to see face recognition solution in Huawei Mate20 in Oct. In the future, as the 3D structured light module solution become mature and practical, we will see more companies use this technology.

Second, Explorer Edition also supports in-display fingerprint recognition. Vivo X21 is the first mass product smartphone support this technology. Explorer Edition and Vivo X21 use the same solution from Goodix/Synaptics[3][4]. The in-display fingerprint sensor has to be integrated into the OLED display. It is optic type compared to traditional capacitive fingerprint sensors. The performance is a little bit slower than traditional one, but it’s good enough for large-scale commercialization.

Xiaomi Mi 8 Explorer Edition in-display fingerprint via cnbeta

Rumors have spread for years that Samsung and Apple attempting to integrate fingerprint sensors into the display. But Apple fully turned to 3D sensing solution and remove fingerprint sensor in iPhone X. It will be a hard decision to go back to fingerprint sensors in its next-generation flagship. Since Apple bought AuthenTec, a leading fingerprint solution provider in 2013, it has a great chance to have an in-display Touch ID in SE series. Now, there are several in-display fingerprint solution providers including Synaptics, Goodix, Qualcomm, and FPC in the market. Synaptics and Goodix are using optic type. Qualcomm and FPC try to use ultrasonic type [5][6].

The price of Mi 8 Explorer Edition will start from $577. Xiaomi is still keeping its amazing cost control. It also will be a challenge for targeting high-end market in the future. Xiaomi tries to learn from Apple who defines smartphone features in the market. It was a great moment as Xiaomi announced Xiaomi MIX which introduced full-screen in 2016. However, Xiaomi must be cautious in its innovative part. Its low price self-limitation make its user would hardly like to pay more money for those new unique innovations. The smartphone market has already slower its growth and been saturated. It will be a good news for Xiaomi as its low price strategy.


[1] Xiaomi Investors Question $100 Billion Valuation Goal for IPO 
[2] Qualcomm and Himax Technologies Jointly Announce High Resolution 3D Depth Sensing Solution
[3] Synaptics’ Award-Winning Clear ID Optical In-Display Fingerprint Sensors Featured on New Xiaomi Mi 8 Smartphones
[4] Goodix’s IN-DISPLAY FINGERPRINT SENSOR™ to Provide “Wow” Factor in Xiaomi’s Mi8 Explorer Edition
[5] Qualcomm Announces Advanced Fingerprint Scanning and Authentication Technology
[6] Fingerprint Cards develops in-display ultrasonic sensing technology


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