Xiaomi Ties With Ouya, Tangles With Pirates
You know a company is starting to mature when it becomes the subject of headlines beyond its control, which is what we’re seeing in the case of 2 of the latest news bits involving smartphone sensation Xiaomi. In the brief 4 years since its founding, Xiaomi has proven itself a master of marketing, able to keep its name constantly in the headlines through a strategic series of news leaks, sensational sales figures and other media savvy tactics. The latest headlines themselves are relatively benign, one involving a new gaming tie-up and the other involving a minor scandal related to pirated products.
Neither of these stories is that interesting by itself, though I’ll review each shortly. What’s more interesting is the fact that that Xiaomi has been so successful at capturing the public’s imagination that it’s rapidly losing control of the same media that helped it achieve its early success. How it manages that loss of control could well determine whether or not it can follow in the footsteps of its biggest role models, Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN).
Evidence of Xiaomi’s loss of control over its media coverage was on prominent display twice earlier this month in Taiwan, a newer market for the company where media are quite savvy and skeptical. One of those incidents saw Xiaomi embarrassed when media exposed it for collecting user data without customers’ consent. (previous post) The other saw Xiaomi fined by Taiwan’s Fair Trade Commission for inflating some of its sales claims — something many believe the company does on a regular basis. (previous post)
All that said, let’s take a closer look at the latest Xiaomi headlines starting with word of a new tie-up with US start-up gaming company Ouya. (English article) According to the reports, the new partnership will see Ouya’s games become available to users of Xiaomi’s Internet TV products, including a set-top box and TVs that are directly connected to the Internet. No terms were given, and the deal looks like a strictly marketing arrangement without any equity exchange.
As a veteran reporter I can say this story was almost certainly leaked by Ouya executives, and Ouya’s chief executive is even quoted saying a final deal could come later this year. As its name becomes well-known, Xiaomi will have to increasingly deal with this kind of news leak by new partners eager to be associated with a big name company. Such news isn’t necessarily bad for Xiaomi either. But these smaller stories risk saturating the media with less important news that could ultimately make it harder for Xiaomi to attract attention for the headlines it really does consider important.
The other Xiaomi headline has the company blaming pirates for a minor scandal involving deficiencies with power supplies in some of its flagship phones. The deficiencies were uncovered in a story by central broadcaster CCTV, which is famous for such investigative reporting. (Chinese article) I’m not completely clear on what happened in this instance, but the bottom line is that Xiaomi is saying the products used in the CCTV tests were not made by a company-authorized vendor.
This kind of problem is quite common in China, with major companies like Apple sometimes becoming embroiled in scandals when, for example, a phone explodes or overheats after being charged with an unauthorized product. This kind of scandal is almost inevitable, and in this case CCTV was attracted to Xiaomi for the company’s high profile. That high profile will also attract other media and detractors, giving Xiaomi one more potential headache to deal with as its name becomes widely known.
Bottom line: Two news items on Xiaomi reflect the company’s growing attractiveness as a headline grabber for third-parties, creating potential problems as it tries to manage its image.
Related posts:
