Xiaomi’s Lei Jun Flips Out, Throws Phone in Economic Observer Interview [UPDATE: Not Really]

This post has been updated, please scroll down to the bottom to see an important update.

Lei Jun, standing creepily in someone's basement in front of photos of Steve Jobs.

Lei Jun has always been an outspoken guy, but recently it seems the Xiaomi CEO and investor crossed the line into crazy during a recent interview with the Economic Observer. Questions about Xiaomi’s pricing, and whether it’s really priced at cost (as the company has suggested) are clearly getting to Mr. Lei, who had the tech CEO equivalent of a toddler temper tantrum when pressed on the issue by reporter Yan Wei.

When Yan asked how much profit Xiaomi’s M1 phone generates, Lei rhetorically asked his staff, “Isn’t that a rude question?” before repeating his assertion that the phone is priced at cost. When Yan pressed, pointing out that phones of similar quality were being sold for 1000 RMB ($158, half the Xiaomi M1’s price) Lei threw his phone onto the desk and said: “You are insulting everyone’s intelligence by comparing a first-class international brand to domestic products.”

First of all, someone on Xiaomi’s staff apparently needs to disabuse Mr. Lei of the notion that journalists are paid to be polite. Although I do have some questions about Yan’s reporting overall, the questions Lei Jun was asked were entirely appropriate and any reporter would have asked them. Lei should have answered them directly without getting indignant or throwing things.

His final comment also leads one to wonder if his grip on reality is slipping. Xiaomi may have garnered some international attention, but it is not an international brand at all, let alone a “first class” one. The phone is not on sale anywhere other than China at the moment, and although the company does plan to expand to Taiwan this year, any plans beyond that remain a mystery. Virtually no one outside of the Chinese-speaking community and the tech community has heard of the phone. Lei Jun may take his inspiration from the late Steve Jobs, but Xiaomi is not Apple. Net yet. In fact, it’s not even close. It is just as much a domestic product as any of the other cheap smartphones Xiaomi is now being forced to compete with.

One also wonders what, exactly, Lei was trying to say by suggesting it’s unfair to compare the pricing of an international brand to a domestic product. Does the Xiaomi M1 cost more because it’s a “first-class international brand”? If the phone is being sold at cost, what the hell does the brand have to do anything? Was Lei Jun inadvertantly admitting that the Xiaomi’s price has been raised beyond its production cost to account for its (non-existant) “first-class international brand” status? Before reading that sentence, I was fairly confident that despite his bluster, Lei Jun was probably telling the truth about the Xiaomi phone’s price. Now I’m not so sure.

As I’ve written before, I own a Xiaomi phone, and I really like it. I find it to be fast, reliable, and of excellent quality for the price. However, I find Lei’s behavior embarrassing, and I wonder if he’s aware that incidents like this will help ensure that Xiaomi never becomes a first-class international brand. Can you imagine the CEO of Apple or Microsoft flipping out and throwing something just because a reporter asked a basic question about a product’s pricing in comparison to competitors?

Even if Xiaomi is telling the truth and the phone really is sold at cost, it’s not like he’s being accused of something awful here. In fact, what he’s being accused of is making a profit. Granted, he’s also being accused of being dishonest with consumers, but that should be easy enough to resolve. How hard could it be to produce some receipts to illustrate the manufacturing and marketing costs for the Xiaomi? If he hasn’t been lying, he should find it quite simple to prove that, and if he has been, he’s going to have to face the music sooner or later.

We have contacted Xiaomi for comment, and will update this story when we hear back.

UPDATE 7/12 12:28: A Xiaomi rep has confirmed that the Economic Observer‘s coverage of this incident is highly dramatized and that while the quotes seem to be accurate, general tone and description of Lei Jun’s actions is not. For those curious, a full video of the incident is available here. Lei Jun does appear a bit agitated and does say that Xiaomi is a first-class international brand, but he doesn’t throw his phone. We apologize for the inaccurate information we originally reported.

[Economic Observer via Sinocism]