Asianometry Podcast Summary
Episode: “Xiaomi is Why Apple Should Have Made a Car”
Host: Jon Y
Date: March 23, 2025

Episode Overview

In this episode, Jon Y narrates the journey of Xiaomi from its roots as a disruptive budget smartphone maker to its bold entry into the electric vehicle (EV) industry. Through the lens of CEO Lei Jun’s leadership and strategic pivots, Jon explores how Xiaomi’s willingness to “just go for it” draws a sharp contrast to Apple’s cautious retreat from its own car ambitions. The discussion offers context on the wider Chinese tech scene, the evolution of both the smartphone and EV markets, and delivers rich insights into corporate strategy, risk appetite, and vision.

Key Discussion Points & Insights

1. The Early Legend of Lei Jun and Kingsoft

• Lei Jun’s Background

  • Inspired by Silicon Valley, Lei Jun started in data encryption and joined Kingsoft, becoming a prominent figure in Chinese tech.
  • Early anecdote (00:50):

    "I saw a very handsome young man dressed in luxury brands... walking with confidence as if a celebrity had just made an entrance."
    — Lei Jun, recalling first meeting Kingsoft founder Chou Bozhen

• The WPS Era and Microsoft’s Rise

  • Kingsoft’s word processor WPS dominated DOS; Microsoft’s entry forced a risky pivot to Pango—ultimately failing due to lack of consideration for customers’ actual needs.
  • Lesson learned: Understand the market before leaping to new technology.

2. Xiaomi’s Meteoric Rise in Smartphones

• From Software to Hardware—MIUI and Mi 1

  • MIUI, a custom Android interface, began Xiaomi’s journey (15:20).
  • First phone (Mi 1) offered flagship specs at a drastically low price, sold only online.
  • Quote on launch event (18:50):

    “When Lei Zheng announced the Mi1's shockingly low price… the keynote crowd cheered for a good 30 seconds.”

• Viral Marketing and Fervent Fan Base

  • Online-only sales and flash sales drove free marketing and a cult following.

• Market Disruption and Growth

  • Rapid valuation rise; by 2014, Xiaomi was valued at $45 billion.
  • But in 2015, sales stalled due to competition and missteps in physical retail expansion.

3. Challenges and Strategic Turnaround

• Losing Ground to Oppo, Vivo, Huawei, and Apple

  • Xiaomi’s focus on online sales left it weak in lower-tier cities where Oppo/Vivo leveraged brick-and-mortar.
  • Huawei’s shift upmarket, in-house chip design, and aggressive retail expansion overtook Xiaomi (31:15).

• Supply Chain Woes

  • Delays in Mi5, supplier disputes with Samsung caused product shortages and quality issues.

• Retail Strategy Overhaul

  • Xiaomi expanded physical “Mi Homes” and partnered with third-party retailers, but faced execution issues.
  • Admitted mistakes and restructured retail strategy for quality over sheer quantity.

4. Pivot to Ecosystem and Product Diversification

• Spinning Off Redmi, Moving Upscale

  • Redmi was separated to target the low-end market, letting the main Xiaomi brand pursue higher margins and premium positioning (45:15).

• Smart Home Ecosystem

  • Investment-led approach: partnering with startups to co-create “Xiaomified” products in fitness bands, scooters, appliances, etc.
  • Quote from SVP Wang Xiang (50:10):

    "Once we find a startup... we invest in those startups. Then we are in charge of product design... If their product can meet our requirements, we will sell it with our brand in our channel."

• “Muji of Consumer Electronics”

  • Xiaomi’s stores became a draw for a wide variety of accessible, decent-quality gadgets.
  • Wang Xiang addresses supermarket critique:

    "You're a smartphone company, they argued. Why do you do rice cookers?... But it's not crazy. It works very well for us."
    (53:00)

• Results

  • Ecosystem strategies helped global resurgence; IPO in 2018 valued at $70 billion.

5. The Leap to Electric Vehicles

• Catalyst: US Sanctions

  • In Jan 2021, Xiaomi faced a US executive order labeling it a “communist Chinese military company,” risking future business.
  • Prompted board reflection: “What would our 30,000-40,000 employees do if smartphones were gone?” (62:00)

• Research and Decision

  • Xiaomi interviewed over 200 EV experts; determined the car industry was approaching modularization like smartphones and PCs.

• China’s Booming, Competitive EV Market

  • Government catalyzed adoption via subsidies, forced quotas, and aggressive infrastructure deployment.
  • Multiple established and startup entrants—BYD, Tesla, Nio, XPeng, Li Auto, and even rivals like Huawei.

• Commitment and Announcement

  • March 2021: Lei Jun pledged 10 billion USD initial investment, aiming for top-5 global automaker status within 10-15 years.
  • Lei Jun on leadership:

    "I am willing to stake all my accumulated achievements and reputation to fight for Xiaomi Auto." (74:40)

• Mixed Reaction and Strategy

  • Pros: Rabid fanbase, digital-native strength, integration potential.
  • Cons: Intense competition, reputation for cash burn, lack of automotive experience.
  • Lei Jun addressed critics head-on, asserting strong finances and plans to avoid distracting the phone business.

6. SU7: Xiaomi’s First Car

• Product Reveal and Features

  • Dec 2023: The SU7 (Super Ultra), a tech-forward midsize sedan with a BMW-sourced design lead.
  • Uses contract manufacturing, but Xiaomi heavily involved in component design.
  • Advanced features include self-driving stack (“Xiaomi Pilot”) and HyperOS, unifying phones, smart devices, and cars.

• Market Position & Delivery

  • Competitively priced just under Tesla’s Model 3 in China; higher-spec models climb to $41,500.
  • Immediate market success:

    "They received 50,000 orders in the first 27 minutes after launch...” (85:10)

  • By late 2024, 140,000 SU7s delivered; EV division making up 10.5% of quarterly revenue.

• Premium Expansion

  • 2024 saw the launch of SU7 Ultra, a “road legal race car” boasting 1,500 HP and 0–100 km/h in 1.98 seconds, selling at $72k–$114k.
  • Stock price rose 295% in a year.

7. Apple: The Road Not Taken

• Parallels in Vision

  • Both Xiaomi and Apple: Visionary marketing, ecosystem play, strong fans, in-sourcing key value.
  • Apple’s legendary risk-taking with the iPhone is a business school case study (101:20).

• Apple’s EV Project Falters

  • Years of indecision, shifting plans, and low margins led to Apple scrapping its car project.
  • Jon Y’s perspective:

    “But sometimes you just have to go for it. And I think Xiaomi out-Appled Apple. Apple should have made a car.” (102:50)

• Quoting Apple Watcher Jon Gruber

  “Apple misses Steve Jobs.”

  • Jon Y’s take: Without a founder with Steve Jobs/Lei Jun’s audacity, Apple lacked the drive to leap.

• Lei Jun’s Subtle Shade at Apple

  • Launch event in Beijing, March 2024 (104:00):

    “I didn’t expect Apple to quit. Xiaomi will support Apple users just as well.”

• The Final Word

  • Calculated risk, not caution, defined Xiaomi’s stride into EVs.
  • Jon closes:

    “I admire that Lei Jun put it all on the line to make a car. I feel like Jobs would have done the same and Apple is all the worse for not having him around to go founder mode one last time.”

Notable Quotes & Memorable Moments

• Lei Jun, on Xiaomi’s car gamble:

  “I am willing to stake all my accumulated achievements and reputation to fight for Xiaomi Auto.” (74:40)

• SVP Wang Xiang, defending the ecosystem model:

  “They said we are like a supermarket or department store... But it’s not crazy. It works very well for us.” (53:00)

• Jon Y, on Apple’s missed opportunity:

  “And I think Xiaomi out-Appled Apple. Apple should have made a car.” (102:50)

• Lei Jun, after Apple exited the car race:

  “I didn’t expect Apple to quit. Xiaomi will support Apple users just as well.” (104:00)

Timestamps for Important Segments

• [00:50] – Lei Jun meets Kingsoft founder Chou Bozhen; inspiration
• [15:20] – Launch of MIUI and entry into smartphones
• [18:50] – Pricing and unveiling of the groundbreaking Mi 1
• [31:15] – Rise of Huawei and market competition
• [45:15] – Strategic pivot: spinning off Redmi and moving upmarket
• [50:10] – Building the smart home ecosystem; Wang Xiang’s philosophy
• [62:00] – Xiaomi sanctioned by US; crisis and boardroom reflection; car idea surfaces
• [74:40] – Xiaomi’s bold EV commitment and Lei Jun’s personal gamble
• [85:10] – SU7 launch, market reception, initial sales numbers
• [101:20] – Parallels and divergence: Xiaomi’s risk vs Apple’s retreat
• [102:50] – Jon Y’s conclusion: “Xiaomi out-Appled Apple.”
• [104:00] – Lei Jun’s reaction to Apple’s EV exit

Tone and Style

Jon Y’s narration is informative yet accessible, weaving historical and business analysis with occasional wit and first-person anecdotes. The tone is admiring of innovative risk, skeptical of corporate caution, and tinged with nostalgia for the boldness of founders like Steve Jobs and Lei Jun.

For New Listeners

This episode provides a comprehensive look into:

• How big tech firms pivot when core markets mature or are threatened
• The vital role of leadership vision and risk tolerance
• Evolving business models in both hardware and ecosystem play
• Why Xiaomi, not Apple, took the plunge into EVs

It’s a nuanced case study in strategic agility and founder-led audacity—a must-listen for those interested in Asia’s tech giants, global automotive trends, and innovation leadership.