Xiaomi Under Fire for Patent Infringement Amidst Big IPO Debut

By Edoardo Donati Fogliazza and Valerie Osipov

Xiaomi, the Beijing-based smartphone manufacturer, filed an initial public offering prospectus in Hong Kong early last week, starting a tremendous buzz among financial experts. As reported by Bloomberg, the company announced a USD10 billion IPO, making this the world’s biggest IPO since Alibaba’s staggering USD25 billion offering in New York in 2014.

The company is believed to have chosen Hong Kong to go public after the former colony lifted its ban on the ‘dual class share structure,' giving founders and executives control even if they do not own the majority of the company’s shares. That increase would bring Xiaomi's value to about USD100 billion which would continue to fuel its recent aggressive expansion abroad.

When it started in 2010, Xiaomi sold only online with very little advertising. At one point, it was plastered with the nickname of 'China’s Apple' for the alleged appropriation of some of Cupertino’s designs, but it has since worked hard to establish itself as a serious tech company.

As its success grew rapidly, Xiaomi's market was still largely focused on serving Asia, primarily its Chinese users, until recently, when it started a process of expansion that brought its phones to 74 countries and made it the top seller in India at the end of last year, according to Counterpoint.

It now sits prestigiously in fourth place after Samsung, Apple and Huawei in the global smartphone market and has diversified its production to include everything from loudspeakers to air purifiers and even house appliances. (Yes, you can buy a Xiaomi rice cooker for your kitchen and – for the true fanatics – toothbrushes.)

With its debut in Spain early this year, Xiaomi announced they are aiming to move into other parts of Europe such as France and Italy by the end of the month, as well as the UK, as reported by The Guardian. As for the US, Xiaomi phones are not available quite yet but a few smart home devices are already set to be released in collaboration with Google very soon, according to TechCrunch.      

Xiaomi's popular smartphone model Mi Mix 2

While this is a cause for celebration to some, others came to crash the party – following the impressive news, Coolpad, a smartphone production company based in Shenzhen, launched a lawsuit against the tech giant. How's that for bad timing?

Xiaomi is accused of patent infringement of Coolpad's multi-SIM card design. As reported by India Today, Coolpad requested a halt in the production and sales of a few of Xiaomi's smartphone models such as the flagship Mi Mix 2.

Coolpad, having had trouble financially over the past year, additionally demands that its rival take responsibility by compensating for the losses that are claimed to be a direct result of the violation.

Since the complaints, Xiaomi has responded calmly, stating that its patent authorities are working to disprove the claims.

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