Xiaomi said today it is spinning off POCO, a sub-smartphone brand it created in 2018, as a standalone company that will now run independently of the Chinese electronics giant and make its own market strategy.
The move comes months after a top POCO executive — Jai Mani — and some other founding and core members left the sub-brand. The company today insisted that POCO F1, the only smartphone to be launched under POCO brand, remains a “successful” handset. The POCO F1, a $300 smartphone, was launched in 50 markets.
Manu Kumar Jain, VP of Xiaomi, said POCO has grown into its own identity in a short span of time. “POCO F1 is an extremely popular phone across user groups, and remains a top contender in its category even in 2020. We feel the time is right to let POCO operate on its own now, which is why we’re excited to announce that POCO will spin off as an independent brand,” he said in a statement.
Xiaomi created POCO brand to launch high-end, premium smartphones that would compete directly with flagship smartphones of OnePlus and Samsung. In an interview with yours truly in 2018, Alvin Tse, the head of POCO, and Mani, had said that they are working on a number of smartphones and also thinking about other gadget categories.
At the time, the company already had 300 people working on POCO, and they “shared resources” with the parent company.
“The hope is that we can open up this new consumer need …. If we can offer them something compelling enough at a price point that they have never imagined before, suddenly a lot of people will show interest in availing the top technologies,” Tse said in that interview.
In the years since, Xiaomi, which is known to produce low-end and mid-range smartphones, itself launched a number of high-end smartphones such as the K20 Pro. It is unclear why the company never launched more smartphones under POCO brand — despite the claimed success.
As we noted in our recent Xiaomi’s earnings coverage, the Chinese electronics giant is struggling to expand its internet services business. Xiaomi posted Q3 revenue of 53.7 billion yuan, or $7.65 billion, up 3.3% from 51.95 billion yuan ($7.39 billion) revenue it reported in Q2 and 5.5% rise since Q3 2018.
On top of that, the smartphone business revenue of Xiaomi, which went public in 2018, stood at 32.3 billion yuan ($4.6 billion) in Q3 last year, down 7.8% year-over-year. The company, which shipped 32.1 million smartphone units during the period, blamed “downturn” in China’s smartphone market for the decline.
More to follow…