Billionaire tech entrepreneur who's exploiting the geeks
LEI JUN (pictured) is a name not many outside China are familiar with, but it’s one well worth keeping an eye on as this man is fast emerging as China’s most successful tech entrepreneur.
According to Forbes magazine, he is “China’s Steve Jobs”.
Two years ago he founded Xiaomi Technology, a mobile phone company, and in August Lei said Xiaomi’s first-half revenue was close to €810 million, when it sold more than three million smartphones.
China is due to take over as the world’s biggest smartphone market at some point this year, and Apple’s iPhone, Samsung’s Galaxy 3s and the HTC One X have been driving the market.
Local firms such as Xiaomi have been quick to move in with cheaper alternatives to keep pressure on the iPhones and Samsungs – which are often too expensive for the lower end of the market.
China is locked in a major price war, and the product causing the biggest buzz is Xiaomi’s MI2, the successor to the MiOne MI.L smartphone.
In July Lei officially became a billionaire, with a net worth of $1.5 billion (€1.21 billion). Xiaomi is estimated to be worth about $4 billion.
But Lei is not your typical Chinese tech entrepreneur. He did not study in the US, like Baidu’s Robin Li did, for example. He doesn’t even speak English. As an angel investor, he has tended to dabble in very domestic companies, and has avoided higher-profile companies.
His career arc has been impressive. He co-founded Joyo.com, the online retailer of books, music and videos, which he sold to Amazon in 2004.
Xiaomi has grown in two years from a company of six employees to 1,400, according to a report in the China Daily newspaper.
The company is currently planning to move to a larger office on the outskirts of Beijing. It recently announced it had received $216 million (€175 million) in investments from “leading international investment firms”, though the identities of the firms were not disclosed. Lei says the money will mainly be spent in research and development, overseas businesses and after-sales services.
Experts reckon the MI2 has better specs than the iPhone 4S, but it sells for less than half the price.
The MI2 goes on sale in October at 1,999 yuan (€254), which is less than half the cost of an iPhone in China. It has a quad-core processor, a high-definition touch screen, an 8 mega-pixel camera and a voice assistant not unlike Apple’s Siri. It runs Xiaomi’s own Chinese-customised version of Android, but also supports standard Android.
The software is updated every week. This is how Xiaomi makes its money, because the phones are sold at about cost price.
“We do not target our products at the general consumers, but at geeks, who are interested in experiencing advanced technology and trying new products,” Lei said.
Clearly the geek market is one worth exploiting.