How Xiaomi Made Smartphones Work Like a Service Business
Business Models Explained with Fexingo: Subscription, Marketplace, SaaS, and Service Companies · 2026-06-18 · 9 min
Episode notes
Most hardware companies sell devices and hope you buy another one in two years. Xiaomi flipped that model. In this episode, Lucas and Luna break down how Xiaomi built a $45 billion business by selling phones at near cost and monetising users through services, ads, and an ecosystem of smart home products. They trace the logic from Xiaomi's 2011 launch to its current position as the third-largest smartphone maker by volume, and examine why the model is hard to copy — it requires extreme supply chain discipline, a software platform, and the willingness to accept razor-thin hardware margins. They also look at where the model wobbles, including India's regulatory pressure on Chinese apps and slowing smartphone replacement cycles. If you've ever wondered how a company can sell a flagship phone for half the price of an iPhone and still be profitable, this episode explains the machine behind the numbers.