Chinese smartphone giant Xiaomi is entering the smart speaker battle

Drawbacks of Smart Home Speakers

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Chinese smartphone manufacturer Xiaomi is entering the smart speaker race, according to TechCrunch.

Its Mi AI speaker, which goes on sale next month for 299 yuan ($45), will only be available initially in Xiaomi's home Chinese market. The firm plans to eventually allow third party developers to design their own voice apps for the device, similar to what both Amazon and Google have done for their smart speakers.

Mi AI's low price gives it a strong chance of capturing a large share of the nascent Chinese smart speaker market.

Xiaomi is well positioned right now because the Chinese smart speaker market is currently fairly empty. Amazon and Google, the two leaders in the US smart speaker market, don't offer their devices in the Chinese market and likely won't do so anytime soon. And other firms are eyeing the space. E-commerce giant Alibaba will release a similar device later this year, and Apple could eventually make its HomePod speaker available in the market given that it already has a presence in the country's smartphone market — but no devices are yet commercially available.
The company also has a price advantage that could be crucial as competitors move into the market in the future. High prices are one of the top reasons cited by people who haven't bought a smart speaker, cited by 12% of such consumers. And that's crucial since potential future competitors to the Mi AI will likely be more expensive. Notably, Apple's HomePod will be available in the US for $399, while Engadget reports that Alibaba's device will be the equivalent of $73.

That might be good news for Xiaomi, since it could grab a share of the market now before the Chinese smart speaker market grows rapidly in the coming years. It will be one of the largest smart speaker markets in the world and the second leading driver of global shipments through 2024, according to Global Markets Insights. That means it's likely going to be lucrative for Xiaomi to get in now before the space scales, especially if it eventually wants to move into markets outside of China.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the US smart home market that:

Analyzes current consumer demand for smart home devices based off results from BI Intelligence's proprietary survey.
Forecasts future growth in the number of smart home devices installed in American homes.
Analyzes the factors influencing the proliferation of voice control devices in the homes.
Identifies and analyzes the market strategies of various companies that have integrated voice control into their smart home ecosystems.

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