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Global Tech

Xiaomi Steals Google Exec on Road to Global Stage

XiamiMost of the world is buzzing with speculation about what prompted a top Google executive to defect to Chinese smartphone maker Xiaomi, but few are giving much credit to one of China’s hottest tech companies for luring Hugo Barra to join its ranks. Most media are focusing instead on an apparent love triangle between Google co-founder Sergey Brin and an unnamed current love interest, who just happens to be an ex-girlfriend of Barra. But instead, I would venture to guess that Barra’s departure has less to do with this titillating love story, and more to do with Xiaomi’s aggressive global aspirations, including its recent receipt of $2 billion in new funding—the most ever for a privately funded China tech firm.

The story of Xioami’s meteoric rise just two years after the launch of its first smartphone is largely being written by co-founder Lei Jun, a charismatic and marketing savvy executive who knows how to create products the market wants and then generate hype around each new launch. Lei and Xiaomi first burst onto the scene in 2011 with their high-performance smartphones that sell for mid-tier prices of less than 2,000 yuan, cultivating a loyal following of younger hipsters through a series of buzz-creating Internet marketing campaigns.

More recently the company has voiced aspirations of taking its product lines global, which is where Barra probably comes in. Barra was formerly vice president of management for Android, Google’s wildly popular smartphone operating system that also happens to be the OS for Xiaomi phones. Barra was also one of Android’s most public faces—a fact that certainly must have drawn the attention of Lei, whose own love affair with the Chinese media has been a major element behind Xiaomi’s success.

Media reports are saying Barra’s decision to leave Google for Xiaomi was unrelated to the love triangle involving Brin. While skeptics may want to blame the triangle for Barra’s departure, I would believe the more pragmatic explanation that he was tempted by a chance to join one of China’s hottest tech start-ups, which probably will go public in the next couple of years. In addition to offering stock in the company as well as options, Lei almost certainly tempted Barra with a generous pay package backed by Xiaomi’s $2 billion in recent new funding.

Xiaomi has been in the headlines nearly nonstop over the last two months, beginning with word of the new mega-funding that Lei later said values his company at a whopping $10 billion. That amount makes Xiaomi one of China’s most valuable private high-tech firms just three years after its founding, on par with PC giant Lenovo (HKEx: 992) and behind only the Internet trio of Alibaba, Tencent, and Baidu. The company’s revenue has exploded since its phones first went on sale in late 2011, expected to double this year to 26 billion yuan ($4.2 billion) from last year’s 12.6 billion.

Lei has also shown himself to be a man with a longer-term vision that includes creating a range of products including Internet TV, tablet PCs, and gaming consoles, designed to create a Xiaomi ecosystem that lets fans move seamlessly from one product to another. Xiaomi is also pushing into lower-cost smartphones, following its launch last month of a model called Hongmi, or “Red Rice,” costing just 799 yuan. True to form, Lei was on the Internet over the weekend hyping the model, showing off photos taken using Xiaomi by his friend Zhang Hongjiang, CEO of software maker Kingsoft.

So, what’s next for Xiaomi following its poaching of Barra? I suspect that Barra will spend the rest of this year getting familiar with Xiaomi’s operations and Lei’s vision for the company. We could then see Barra become the public face for Xiaomi for a more aggressive global expansion of Xioami in 2013, which could include the company’s entry into western markets including the U.S. and Japan. Lei has previous expressed global aspirations for his company, though so far they have been limited to Hong Kong and Taiwan.

I’ve said before that I personally believe that Lei, who likes to compare himself to legendary Apple co-founder Steve Jobs, may be trying to do too much too quickly, which could lead to growing pains for Xiaomi in the next year or two. But others, including Barra and Xiaomi’s new investors, clearly have more confidence in Lei’s abilities, and I expect we’ll see this dynamic company stake out an increasing presence in the global headlines with its worldwide expansion in 2014.

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