Xiaomi, after recording blockbuster sales on China’s Singles Day mega sale, is now looking at even higher avenues. The Chinese smartphone manufacturer is planning(via DigiTimes) to invest in a JV to develop low-cost 4G chips, for its upcoming models.
The Joint Venture, of which Xiaomi has proposed to hold 51% stake, is with China-based IC design house Leadcore Technology. As per sources, Xiaomi will account for 51% share in the joint venture, while Leadcore, a subsidiary of Datang Telecom, will take up the remaining 49%.
As part of this deal, Datang (Leadcore’s parent company) has announced that Leadcore will transfer its 4G platform, the SDR 1860, to the joint venture for a CNY103 million (US$16.82 million) royalty.
Almost all of Xiaomi’s current devices, have chips manufactured by Qualcomm (Snapdragon) and partly by MediaTek and Spreadtrum Communications. Once this Joint Venture becomes fully operational, Spreadtrum will reportedly loose most of its orders from Xiaomi.
Xiaomi’s primary motive, behind the formation of this joint venture, is to secure extremely low-cost 4G chips for its upcoming smartphones, and hence continue to offer 4G devices at highly competitive prices. Xiaomi’s pricing strategies and its refreshing MIUI has been the reason why this 4-year old Chinese manufacturer has jumped up to become world’s third largest smartphone vendor.
