Consumer Electronics / SemiconductorsChina
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JOURNEY · DETAIL
Lei Jun and Xiaomi: Leaving Kingsoft for a Second Venture at 40, Charging into the Global Top Three with Cost-Effective Smartphones over a Decade
Founded: Lei Jun · Xiaomi Group
JOURNEY
Key Fields
FIELD STAMPSIndustryConsumer Electronics / Semiconductors
RegionChina
ScaleGiant
ChannelOther
Origin
After graduating in 1992, Lei Jun joined Kingsoft Software, rising from programmer to CEO, leading Kingsoft to an IPO over 16 years, and achieving financial freedom at age 32. At 40 in 2010, he chose to leave Kingsoft's achievements behind, founding Xiaomi with partners over a bowl of millet porridge. His motivation stemmed from his judgment that the mobile internet would rewrite smartphone industry rules, while traditional channel costs were too high and international brand prices remained stubbornly high. He proposed using internet thinking to build hardware, leveraging extreme cost-effectiveness and a fan-participation model to carve out the whitespace market between copycat phones and high-priced devices.
Milestones
2018
IPO Turning Point
Xiaomi was listed on the Main Board of the Stock Exchange of Hong Kong in 2018 under stock code 1810. Prior to the IPO, the market valued it higher based on internet company metrics, but it was ultimately priced as a hardware company with an issue price of HK$17. It broke below its issue price on its first day of trading. At the listing banquet, Lei Jun publicly stated his determination to double the investment for day-one investors—a remark that later became the starting point for long-term pressure and reflected the capital market's division over its hardware margins versus ecosystem value.
2007
Kingsoft IPO Turning Point
Kingsoft Software went public in Hong Kong in 2007, and Lei Jun completed the company's capitalization as CEO. However, post-IPO growth across Kingsoft's online gaming and office software business lines was unremarkable, and the stock price remained sluggish for a long time. This experience made Lei Jun aware of the ceiling facing traditional software companies, prompting him in 2010 to insist on building hardware using internet tempos, user communities, and rapid iteration to avoid repeating the slow organizational pace within the Kingsoft system.
2011
First Smartphone Release PMF
In August 2011, the Xiaomi 1 was released at a price of 1,999 yuan, and pre-orders quickly surpassed 300,000 units on the first day. This price was far below contemporaneous international flagship phones, while its specs approached high-end Android devices. Xiaomi leveraged the geek user base accumulated through the MIUI forum as a seed community, sparking flash sales and word-of-mouth promotion. This milestone validated the genuine market demand for a combination of internet direct sales and high cost-effectiveness in domestic smartphones, establishing the basic foundation on which Xiaomi relied for online flash sales during its first five years.
2014
Peak Market Share Growth
In 2014, Xiaomi smartphone shipments grew rapidly, briefly reaching the top spot in domestic market share. According to third-party data at the time, Xiaomi disrupted offline channels with its online-focused sales model, achieving annual shipments exceeding 60 million units. However, rapid growth also accumulated problems: unstable inventory preparation for core supply chain components, insufficient offline service outlets, and weak overseas patents and channels. This year marked the peak of Xiaomi's early expansion, followed by a two-year adjustment period.
2016
Sales Decline Failure
In 2016, Xiaomi smartphone shipments declined year-over-year. While official detailed domestic sales figures were not fully disclosed, market research firms showed Xiaomi dropping out of China's top five. The online flash-sale model hit growth bottlenecks, offline channels were heavily blanketed by OPPO and vivo, and the Redmi brand brought scale while dragging down average selling prices and profit expectations. Lei Jun returned to frontline management to take direct charge of the supply chain, gradually restoring momentum thereafter.
2019
Dual-Brand Split Turning Point
In early 2019, Xiaomi spun off Redmi as an independent sub-brand headed by Lu Weibing, focusing on extreme cost-effectiveness, while the Xiaomi main brand moved upmarket into the mid-to-high-end tier. This adjustment resolved the internal tug-of-war between low-price volume and premiumization goals. Redmi shouldered sales and the online market, while the Xiaomi digital and MIX series gradually raised prices, paving the way for subsequent ASP (average selling price) growth. In the year of the split, Xiaomi's global smartphone shipments returned to a growth trajectory.
2021
Announcement of EV Venture Turning Point
In March 2021, Lei Jun announced that Xiaomi was officially entering the smart electric vehicle industry, calling it the final major entrepreneurial venture of his life. He publicly stated a commitment of US$10 billion over 10 years, with an initial investment of 10 billion yuan. This decision extended Xiaomi from smartphones and AIoT into an automotive industry requiring long-term capital and manufacturing capabilities, while altering how the market and supply chain evaluated Xiaomi's operational boundaries.
2024
Automotive Delivery Commences Growth
The Xiaomi SU7 was officially released and deliveries began in March 2024, with order volumes far exceeding expectations. Entering vehicle manufacturing with a smartphone company background, Lei Jun replicated Xiaomi's experience in supply chain integration, online marketing, and user operations into the automotive sector. The initial volume ramp-up of the automotive business began altering Xiaomi Group's revenue structure, while driving the capital market to re-evaluate Xiaomi with a growth-stock premium.
2025
High-End & Self-Developed Chips Growth
In 2025, Xiaomi released a 15,999 yuan foldable screen model, setting the highest pricing record in Xiaomi smartphone history, while officially disclosing cumulative chip R&D investments exceeding 21 billion yuan. Earnings calls that year noted record highs for smartphone average selling prices, with another 60 billion yuan slated for AI investment over the next three years. Xiaomi no longer relies solely on budget models for volume; high-end devices and self-developed technology have become new growth fulcrums.
Turning Points
- Sluggish stock prices following Kingsoft's 2007 IPO resolved Lei Jun to rebuild hardware using internet thinking
- Sales falling out of the top five in 2016 prompted Lei Jun to return to the front lines to take charge of the supply chain and channels
- The 2019 independence of Redmi decoupled cost-effectiveness tasks from premiumization objectives
- The high-profile 2021 announcement of EV manufacturing brought the company into heavy-asset, long-cycle competition
- The volume delivery of the SU7 in 2024 validated the feasibility of the first phase of a smartphone company cross-over into cars
Failures & Pitfalls
- Sharp declines in Xiaomi smartphone shipments in 2016, dropping out of China's top five
- The 2018 IPO breaking on day one, with capital markets pricing it strictly as a hardware company long-term
- The early pure-online flash-sale model being outpaced by OPPO and vivo in the offline market
- Initial lack of core technology in high-end models, leading to prolonged skepticism as merely an assembly factory
- Redmi's low-price volume strategy pulling down overall profit expectations and making high-end transformation difficult
关键成功要素
- Replacing traditional hardware sales tiers with instant internet feedback and fan communities
- Building scale first through extreme cost-effectiveness before gradually moving upmarket
- Splitting Redmi from the main brand to prevent low-price branding from locking out high-end room to grow
- Lei Jun's personal IP providing long-term product launches and company trust endorsement
- The EV decision extending the company beyond smartphone cycles into a larger arena
- Self-developed chips and high-priced foldables establishing 15,999 yuan as an anchor point for high-end testing
Lessons
- If a hardware company relies solely on low-price volume, it will stall rapidly when channel dynamics shift
- Capital market valuation logic for hardware does not automatically translate into internet valuations
- Dual-brand separation protects high-end positioning better than internal friction within a single brand
- A founder returning to the front lines can stop bleeding short-term, but long-term success requires organizational and supply chain competence
- Cross-over vehicle manufacturing requires replicating smartphone-era user operations into higher-ticket products
- Premiumization cannot rely solely on price hikes; it requires self-developed chips and unique form factors as support
Core Data
- 小米手机2026年上半年全球出货量约：Approximately 65 million units
- 全球手机市场排名：Third
- 小米史上最贵手机售价：15,999 yuan
- 造芯累计投入：Over 21 billion yuan
- 未来三年AI投入：60 billion yuan
- 小米生态设备用户规模：MAU exceeding 700 million
- 金山软件上市年份：2007
Competitors / Peers
Xiaomi's smartphone business primarily benchmarks against Apple, Samsung, OPPO, vivo, and Transsion. Apple and Samsung occupy the high-end and full-price-segment advantages in the global top three; OPPO and vivo possess long-term accumulations in offline channels and imaging capabilities; and Transsion holds a captive base in Africa and low-to-mid-end markets. Xiaomi's differentiation lies in its ecosystem scale, online user operational efficiency, and the new product narrative formed after cross-over vehicle manufacturing, though it still lags behind Apple and Samsung in core chips and brand premium.