Xiaomi no longer focused on smartphone sales figures, says CEO

Xiaomi CEO Lei Jun, image via Fortune Live Media

Today at the World Internet Conference in Wuzhen, Xiaomi CEO Lei Jun dropped a few surprising quotes. Namely, he debunked the idea that a smartphone company’s number-one goal is, well, selling smartphones.

“Xiaomi does not emphasize goals such as smartphone sales anymore,” he said during an onstage interview that was transcribed by the official MIUI blog.

“I want to get rid of traditional key performance indicators,” Lei Jun added.

It’s certainly possible that Xiaomi is reworking its KPIs to give less weight to smartphone sales. After all, Xiaomi is not exclusively a phone company – it sells everything from Windows tablets to fitness trackers to water purifiers.

But it’s also entirely possible that this is damage control. Last year, Xiaomi was brimming with confidence. After a stellar 2014, the company announced its 2015 sales target: 100 million phones. By this March, it was clear that that prediction was a bit too optimistic, and Lei Jun announced that the company was aiming for a – still massive – 80 million sales. But that seems to have been a bit out of the company’s reach as well.

The company, often called “China’s Apple”, has not released its official sales figures for the last quarter of 2015, but it looks like even with its successful Singles Day sale of some US$110 million, the company will likely fall short of its 80 million sales target.

A different company

All together, Lei Jun’s statements are damage control, sure, but they’re also a reminder that smartphone sales alone aren’t a great metric for judging the state of the company in 2015.

Starting in late 2014, Xiaomi saw sales of its cheap MiBand fitness tracker skyrocket, and also expanded its smarthome tech offerings to include air and water purifiers. This year the company has also released new 3D TVs, updated tablets, scooters, and a variety of other non-phone devices. Smartphones are still a fundamental part of the company’s model, but they are no longer the only driver of growth.

In the previous quarter, Xiaomi saw domestic competitor Huawei surpass it in smartphone sales, according to Canalys. If the companies were being judged by their phone sales alone, then it may be time for the folks at Xiaomi to get worried. But Lei Jun seems unfazed.

“I don’t really care [about] numbers such as global shipments and market share anymore,” he told the Wuzhen audience. “What we care the most is the customer’s satisfaction.”

That sounds like PR spin, but it’s also a smart strategy for Xiaomi. As the company becomes an established brand – instead of an insurgent startup – it makes sense to focus on more than just raw numbers. Smartphone consumers are notoriously not loyal to brands, especially when it comes to Android platforms. If Xiaomi can foster some semblance of brand loyalty, then they’ll be able to accomplish a feat that companies like Samsung, HTC, and others have found elusive.

The company also has to face up to the fact that its expansion plans, particularly in India, have not resulted in explosive growth. In its third quarter, smartphone sales outside of China made up just 7 percent of the company’s total, and figuring out how to grow that number will surely be a top priority for Xiaomi in the coming year.

Measured by phone sales alone, Xiaomi’s 2015 may look a bit underwhelming. But then, you could argue that setting insane targets and falling short of them isn’t failure, per se. It will take some time (and a peek into fourth-quarter financial reports, once they’re out) to see how Xiaomi really did this year.