Xiaomi may launch laptop in 2016, increasing cost pressures on Apple, Lenovo

Xiaomi's venture into PCs comes as growth in its core market winds down.
Xiaomi's venture into PCs comes as growth in its core market winds down.PHOTO: AFP

BEIJING (BLOOMBERG) - Xiaomi is considering the introduction of its first laptop early next year, people with direct knowledge of the matter said, opening a new front in its battle against Apple and Lenovo Group.

Xiaomi's notebook may go on sale in the first quarter to compete with such premium computers as Apple's MacBook Air and Lenovo's ThinkPad, the people said, asking not to be identified because the matter is private. Xiaomi has held talks with Samsung Electronics to supply memory chips, and that initial agreement may extend to providing displays, the people said.

Only five years after its founding, Xiaomi has vaulted into the global smartphone industry's top ranks by providing stylish devices with premium components at mid-range prices. Xiaomi getting into the PC business risks bringing additional cost pressures to industry leaders Lenovo, Hewlett-Packard and Apple.

Supplying Xiaomi, the fourth-largest smartphone vendor, will boost Samsung's components business as its tries to reduce reliance on providing for its own Galaxy devices.

Samsung and Xiaomi declined to comment in separate e-mails.

Lenovo dropped as much as 4.3 per cent in Hong Kong. Shares of Samsung rose 0.7 per cent as of 2.38 pm in Seoul.

Xiaomi's trying to carve out a spot in a rapidly shrinking market. IDC forecast in August an 8.7 per cent slide in 2015 PC shipments and does not expect a return to growth till 2017.

The Chinese company co-founded by billionaire Lei Jun made its mark with cheaper smartphones sold online before moving into higher-end devices, buoyed by a thriving online community. Until now, its other hardware forays have been confined to sales of appliances and accessories such as earphones and TVs.

Xiaomi's venture into PCs comes as growth in its core market winds down. Worldwide smartphone sales recorded their slowest growth rate since 2013 in the second quarter of 2015, according to Gartner. A rapidly maturing home market has prompted Xiaomi to look towards India, Brazil and other less- saturated smartphone arenas.

Samsung too is grappling with slowing sales of its own high-end Galaxy range and in July, it posted a fifth straight drop in quarterly profit.