Google confirmed on Thursday that VP of Android Product Management Hugo Barra will leave the company to join Xiaomi, a China-based private maker of low-cost smartphones. Xiaomi CEO Lei Jun said Barra will be leading Xiaomi’s expansion beyond China.
Xiaomi sold $2 billion in handsets in China in 2012. The company designs products that imitate the iPhone’s minimalistic style; Lei’s imitates of Steve Jobs’ style of dress and product presentations — branding strategies that have paid off, with the two companies intertwined in the Chinese market’s mind. Xiaomi is known for selling a range of high-powered, low-priced smartphones. Xiaomi’s flagship device, the eponymous Xiaomi Phone 2, has specs on par with its Samsung and HTC’s counterparts: a 1.5-GHz quad-core processor, an Adreno 320 graphics chip, 5GB of cloud storage, an 8-megapixel camera. And it retails for $310 compared to the Galaxy S4’s unsubsidized price of $649.
Barra, who was the public face of Android, led several major product launches such as Google’s line of tablets, the Nexus series. Android hit the billion-user mark just a few months before his departure; Google Play, the app marketplace of Android, hit the 50-billion-download mark.
Barra’s departure is in part attributed to a mini-scandal that just broke at Google. He was previously involved with co-founder Sergey Brin’s new girlfriend, and the news of his departure filtered out just a day after Google confirmed Brin’s separation from his wife. Xiaomi’s move to poach (as many observers see it) Barra– and his decision to accept their offer — provide a glimpse into the future of smartphones.
This future might well lie outside of Silicon Valley and in emerging markets such as China and India. And its crucial battle might be the effort to keep prices low and phones good-but-not-great rather than to deliver powerhouse after powerhouse.
Analysts have predicted that U.S. smartphone purchases could reach a saturation point as early 2014. Research company eMarketer has reported a plateau in mobile usage in the U.S. with a less than 2% increase in the number of mobile phone owners between 2013 and 2014. In Western Europe, mobile phone shipments declined 4% year-over-year as of Q1 2013 according to the International Data Corporation. The number of smartphone users in Western Europe grew 12% year-over-year, the slowest rate to date. Meanwhile, the IDC reported that global smartphone shipments grew 52% year-over-year in the same quarter. The country with the fastest growth rate has been India, with a 21% year-over-year increase in shipments.
Given that the high-cost handsets made by Apple (the $840 price tag of an iPhone is two months salary of an entry-level software engineer in India) and Samsung have been unsuccessful in emerging markets, low-cost, usable-but-not-extraordinary handsets could be killer product. Xaomi is already in that game, and Barra will bring with him skill and knowledge that will allow the device-maker to up its state of play. A good thing, too: Mozilla and China Mobile have already started dipping toes in that very market.