Lei Jun: Xiaomi Focuses on Hardware, Software, Internet Services

This is a part of our TechCrunch Disrupt 2011 event coverage.

Day 2 of Disrupt Beijing kicks-off with angel investor and serial entrepreneur Lei Jun talking about his latest start-up Xiaomi in China, moderated by Sarah Lacy. Lei Jun says that Xiaomi is a company that focuses on three different areas — software, hardware, and internet services. He imagined if Microsoft, Google, and Motorola can combine and build a phone that is better than Apple’s.

“My purpose in creating Xiaomi is to create a brand that is recognizable worldwide,” says Lei Jun. On the Chinese market, Lei Jun says that China is an open market, yet it’s a closed market, and a huge market. Many foreigners don’t understand that, and he believes that these three points are what make China special and also make it possible to have made-in-China global brand. Xiaomi costs just 1999 RMB (about $315) without a contract and is a phone that is made, he insists, of the highest quality hardware available in the world.

“So we want to create a world-class phone at an affordable price, just like what Amazon did with Kindle,” says Lei Jun. On hardware, Lei Jun says they have some amazing folks who were previously from Motorola. And on Xiaomi’s user interface, Lei Jun uses Miui, a popular Android ROM. “We got a bunch of services on the phone, like Miliao, a messaging service which allows handwritten content, audio, and video.”

(Click here to catch our previous Xiaomi demo)

“Google’s Nexus One has been a flop so how can Xiaomi do it?” Lei Jun thought to himself. And on that he feels that Google doesn’t understand the hardware part of the business, but he does. On product likability test, Lei Jun uses Baidu to gauge the market sentiment and he found out that Xiaomi has four times more search queries than Apple’s iPhone 4.

The Thailand flood has caused some problems to Xiaomi which is made of over 800 parts but Lei Jun says that he has tide over the crisis. Lei Jun says that all Xiaomi phones are sold online and that is because he has deep experience in the e-commerce market.