Global Tech

Xiaomi Hit by Apple’s Ive, Lifted by Qihoo’s Zhou

xmlogoPublicity savvy smartphone maker Xiaomi was making awkward noises in the blogosphere this past week, as it found itself stinging from critical remarks made by a top executive at Apple, the company’s role model. At the same time, the company got an unexpected show of support from another source, as controversial Qihoo 360 CEO Zhou Hongyi defended the smartphone maker over a different brouhaha involving involving an embarrassing data security investigation in Taiwan.

In separate news, TV giant TCL Chairman Li Dongsheng was talking up a potential electronic payments alliance, with word that his company is discussing a tie-up with UnionPay, operator of China’s leading electronic transactions network. Just last week, I commended Li for taking some new risks a decade after two disastrous partnerships with European companies. But this latest chatter is starting to get a bit worrisome, as Li seems to be thinking in quite a few directions that are increasingly scattered and lack any common theme. 

Let’s begin with Xiaomi, which has risen rapidly over the last two years on its trendy smartphones and savvy marketing campaigns by co-founder and chief executive Lei Jun. After years of largely positive media coverage, Xiaomi has suddenly found itself in the less familiar position of some negative stories stemming from a string of minor scandals. One of the most recent of those occurred last month, when word leaked out that the company was being probed by Taiwan for posing a security risk because its phones sent some of their user data to off-shore servers in China.

Now the company has come under fire again, this time from comments made by Apple senior vice president and lead designer Jonathan Ive, who accused companies like Xiaomi of stealing from true innovators like Apple. The criticism is especially sharp in this case, since Xiaomi’s Lei Jun has long considered Apple his company’s role model and likes to think of himself as China’s version of Apple co-founder and tech legend Steve Jobs.

Ive’s remarks came during an event in which he discussed Apple’s design process, and were in response to a question on what he thought about Xiaomi. Ive reportedly responded that he didn’t see the actions of companies like Xiaomi as flattering, but rather viewed such companies as thieves for stealing from innovators like Apple that poured years of work and huge sums of money into their produce development.

Lei Jun would only address the issue indirectly on his microblog, saying it was important for people to understand that his company was still in its formative stages and needed time to develop. But the uneasy nature of his remarks reflected the hurt that he almost certainly felt on being labeled as a copycat by his biggest role model. Meanwhile, Tang Mu, an executive from Xiaomi’s router division, expressed his own respect for Ive, but added that the Apple executive didn’t completely understand his company.

While Xiaomi executives were licking their wounds from the unexpected criticism, the company got some unexpected moral support from Qihoo 360′s Zhou Hongyi on the Taiwan investigation, which was big news at the end of September. Zhou noted that in the digital age of cloud storage, everyone needs to get used to having their data moved around and stored in a wide range of places. He added that Xiaomi’s biggest error was its failure to notify customers of that fact, and that all companies in the future will have an obligation to make such disclosures.

Next let’s look quickly at Li Dongsheng, who was in the headlines last week when TCL announced a new cloud computing joint venture with U.S. networking equipment giant Cisco. That particular deal came after Li recently hinted at another potential tie-up with faded Taiwanese smartphone maker HTC, and came a year after he also formed an Internet TV partnership with search giant Baidu.

Now Li has disclosed on his microblog that his company is in talks for an electronic payments venture with UnionPay, which itself is a joint venture between China’s major banks. Li made his disclosure at the end of a longer post about the growing popularity of third-party payment services, and didn’t provide any details on what TCL’s own new tie-up might look like. I suspect it would be some kind of service built into TCL’s two core product lines in TVs and smartphones.

But as I’ve said above, this latest foray is starting to make Li look like a traditional industry executive scrambling to catch up with younger rivals like Alibaba and Tencent founders Jack Ma and Pony Ma. That kind of imitation can be a dangerous game if you don’t know what you’re doing, leading me to worry that Li’s increasingly divided attention could cause him to make some poor business choices.

Doug Young lives in Shanghai and writes opinion pieces about tech investment in China for Techonomy and at www.youngchinabiz.com. He is the author of a new book about the media in China, “The Party Line: How the Media Dictates Public Opinion in Modern China.

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