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Xiaomi Corp. Vice President Of Global Operations Hugo Barra Interview
Hugo Barra, vice president of global operations at Xiaomi Corp., points to a Xiaomi Corp. Mi Band while speaking during a Bloomberg Studio 1.0 interview in San Francisco, California, U.S., on Thursday, May 28, 2015.  Photograph by David Paul Morris — Bloomberg via Getty Images

Meet the dark horse of the wearables market: Xiaomi Mi Band

Aug 27, 2015

Compared to the best-selling wearables in the United States, Xiaomi’s Mi Band looks underwhelming: It can’t display notifications, connect to third-party apps, or even tell the time. But, in the end, the product might just end up being what disrupts the wearables market just as it’s heating up.

Xiaomi shipped more wearable devices in the last quarter than everyone except tech giants Fitbit and Apple, according to a new report from IDC. In the second quarter of 2015, Xiaomi shipped 3.1 million units of its Mi Band -- over four times as many wearables as the fourth place company, Garmin, and good for 17.1% of the global market. Sure, Xiaomi is best known for its smartphones, but it’s truly a major player in the fitness tracker world.

What makes the Mi Band’s rise so striking is that previously, it was sold only in a few select markets -- most importantly, China.

“Xiaomi is really a Chinese phenomenon right now. The vast majority, we’re talking 97% of its units, are ending up in China.” says Ramon Llamas, research manager at IDC.

The Mi Band finally went on sale in the United States and Europe this past June when Xiaomi opened up its online store. So IDC’s data only includes a single month of US sales. With increased availability, the Mi Band could be in line for a major bump in sales. Still -- Xiaomi's online sales model might not translate particularly well to the United States.

“Wearables are still new, people want to try these on, and you can’t do that online that well,” says Llamas. “Xiaomi is a great Chinese brand with great distribution, but low brand visibility in the US and limited distribution. It’s going to be a challenge to say the least.”

Wearables is a broad category and it’s a valid argument that you can’t compare a Fitbit Charge or Apple Watch to a Mi Band. An Apple Watch is a full computer on your wrist. The Mi Band doesn’t even have a screen.

But the Mi Band is radically cheaper than almost any other major wearable. It’s $15 and can do the same step tracking and sleep quantifying as Fitbit and Jawbone, all for a fraction of the price. Its simplicity helps it sport a 30-day battery life, which makes it less likely to end up in a drawer because users forgot to charge it. Its low price also makes it a realistic buy for the emerging middle class in many developing countries.

Some evidence suggests that over 50% of Fitbit users abandon their device within 12 months. The fact that Mi Band is less expensive than American wearables could convince lapsed Fitbit users to give step tracking another chance. And, if the $15 Mi Band ends up in a drawer, it’s not a big loss.

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