Xiaomi will invest RMB 100 billion (approximately $1.457 billion) in artificial intelligence and the internet of things (AIoT) in the next five years, according to its Founder, President and CEO Lei Jun.
Lei announced at the company’s annual party on January 11 that smartphones plus AIoT will form this dual strategy.
Smartphones have been Xiaomi’s core business in the past years. But as of September 30, 2018, the Chinese smartphone maker reported that it has more than 132 million connected smart devices (excluding mobile phones and laptops) connected to its consumer IoT platform, with more than 20 million daily active devices.
“Before the proliferation of 5G technology, Xiaomi’s success in smartphone business segment lies in striving to consolidate its leading position in the smartphone markets across the world,” said Lei.
The announcement came on the heels of the company’s acquisition of 65 million shares, or 0.48 percent, of home appliance industry firm TCL Corporation from Shenzhen Stock Exchange’s secondary market on January 4.
This followed the signing of a strategic cooperation agreement between the two companies in December for a joint research and development of the integration of high-end basic components of intelligent hardware and electronic information core.
The agreement means both parties will innovate the application of new device technology in the next generation of intelligent hardware, according to Xiaomi.
Lei said the cooperation with TCL is beneficial to Xiaomi’s further exploration and growth in its home appliance business.
“In 2019, Xiaomi is determined to introduce amazing home appliances that are honestly priced,” he said in a news release.
The home appliance business is a new growth engine for Xiaomi. In December, it partnered with Ikea to develop IoT devices for smart homes, promising to introduce a full range of smart lighting products which will be connected to its IoT platform starting in China.
In 2019, the company said it plans to enter the white goods market by adding new product lines, namely air conditioners and washing machines to its portfolio.
Meanwhile, TCL will be shifting focus to semiconductor displays, materials and emerging businesses, according to its strategic adjustment announced earlier.
Xiaomi in 2019
In 2019, Xiaomi said its smartphone business will continue to focus on innovation, as well as to optimize its product portfolio.
On January 10 in Beijing, the company announced that the mobile phone Redmi will operate as an independent brand while Mi will strengthen its presence in the mid- to high-end smartphone markets and new retail channels. It will also adopt a multi-brand strategy for Black Shark, POCO and Meitu.
Xiaomi will also continue its global expansion with focus on the European and Latin America markets as well as build a new retail system.