Xiaomi is reportedly preparing to launch a smartphone powered by its own processor later this month. The move is being seen as an effort by Xiaomi to stand out amongst competitors and also become less dependent on chip suppliers like MediaTek and Qualcomm.
Xiaomi is likely to name its processor, Pinecone. A source familiar with developments told The Wall Street Journal, that Pinecone will release this month. With the introduction of Pinecone, Xiaomi will become the second Chinese smartphone manufacturer after Huawei to develop in-house SoCs. Xiaomi, often referred to as the Apple of China, lost a significant market share last year. According to IDC, Xiaomi's 2016 shipment volume declined by almost 36 percent and the company is under pressure from Oppo, Vivo and Huawei.
Xiaomi's decision to build its own processor may benefit the company in India, its biggest market outside of China. It currently uses MediaTek SoCs on its budget devices and Qualcomm chipsets on high-end products. But, the company is forced to launch products with only Qualcomm chipsets due to a patent dispute. "With Pinecone, Xiaomi can launch smartphones with its own chipsets in India and also insulate it from supply-chain disruptions," notes WSJ.
Apple, Samsung and Huawei – the top three smartphone vendors – design their own chipsets and it will be interesting to see whether Xiaomi's processors can compete against these three big names. Xiaomi has been tight lipped about the development of Pinecone, but a recent Weibo page listing suggested that the launch is imminent.
"Apple, which has its own operating system, and Huawei, which has decades of experience making network equipment, are the leaders in self-developed chips," Wang Yanhui, Secretary-General of the Mobile China Alliance was quoted as saying.
In the past year, Xiaomi has expanded beyond smartphones with its own IoT devices. Development of its own processors will allow the company to bring down the cost of its products and also expand to markets faster than usual. The biggest challenge for Xiaomi would be to reach the scale achieved by Apple and Huawei, who have gained years of expertise in the industry now.