Xiaomi’s new sub-brand POCO is the company going back to its roots

• The POCO F1 doesn’t bring something particularly new to the table, but it’s a play on price, that Xiaomi has always been great at.
• With the POCO F1, Xiaomi is taking on OnePlus head on, just like it did with Motorola four years ago.
  
• The POCO F1 starts at ₹20,999 (approx $300) and runs the Snapdragon 845 platform and a 6/64GB SKU.

A long time ago, Motorola created what is now a thriving budget market in India. The Moto G was the first phone to give Indian users a taste of budget phones that punched above their weight.

But Motorola's move was the first step in what would eventually be a revolution. And the exclamation point in that revolution was brought around by Xiaomi when it entered the country with the Mi 3, a phone that didn't just punch above its weight but TKO'd all its opponents.

But that was then. And four years later, history is repeating itself. The battle this time is against OnePlus and Xiaomi is creating a whole new brand, called POCO, to take this challenge on.

Xiaomi vs OnePlus

The two Chinese upstarts have arguably the most loyal following amongst smartphone brands today. However, in the premium phone segment, OnePlus has routinely foiled Xiaomi's party.

It started with the Xiaomi Mi 4, which was foiled by the OnePlus One, and you can trace the history since. OnePlus' phones have usually launched a few months after Xiaomi's flagships, and barring the OnePlus 2, they've all been better.

In doing so, OnePlus has also bolstered a new segment in India. It targets a buyer who doesn't want to spend ₹40,000 or more, but wants flagship devices. You could argue that such buyers always existed in India, but they had enough choices only when other companies started competing against OnePlus.

Xiaomi today leads the Indian smartphone market, but OnePlus leads its premium segment. Interestingly, the former has always failed at premium phones, while the latter has failed at budget phones.

Enter POCO

In theory, the POCO F1 could do to OnePlus' market what the Mi 3 did to Motorola's. Leading the premium smartphone space in India doesn't mean much if you consider the fact that the lion's share of sales happen in the cheaper price segments.

But this is almost exactly the way the 10-20k segment was when Motorola first launched the Moto G. OnePlus today has 50% of a segment that can still grow, and Xiaomi wants to be part of that growth.

A quick look at the POCO F1 tells you that the phone isn't anything special. It's certainly a good flagship smartphone, but in a sea of devices, it has nothing that really sets it apart. That is, nothing other than its price.

In essence, it is 2018's Mi 3. There is no phone that runs the Snapdragon 845 chipset at Rs 20,999 (approx. $300), and there's no phone that offers the chipset and 8/256GB memory SKUs at ₹28,999.

On top of that, it has literally everything the OnePlus 6 does and adds jargon like water cooling etc. to it. Xiaomi was quick to cite benchmark scores when explaining the POCO F1's penchant for sustaining high speeds over prolonged gameplay etc. But if you think about it, a 10-15% drop in benchmark scores is almost impossible to discern in general phone usage, gaming or otherwise.

Banking on price

The POCO F1 is one of those phones that can't be argued against. And we've said that about the OnePlus 6, 5 and 3 before. What it basically does, is it brings the price down to levels no one expected.

As a result, reviewers and consumers can now question OnePlus' pricing for its smartphones.

Neither Xiaomi nor OnePlus have the brand equity of a Samsung, so they can't hope to jack up the prices to those flagship levels, probably ever. However, each can use its current equity to drive a whole new product. OnePlus does this by selling accessories, Xiaomi does too, and now it's launching a new brand.

A new outlook

Last but not the least, POCO offers the company a way to disassociate itself from Xiaomi but still use its brand value. It needs to do that because people don't expect expensive phones from Xiaomi. The company has never been successful in the 20k plus segment.

By running a new brand called POCO, Xiaomi can tell a new story, a different story, and still use its existing infrastructure. Case in point, POCO phones will be supported by the 1000+ service centres that Xiaomi has amassed in the country.

Unlike OnePlus, Xiaomi is a public company now, which has to answer to shareholders. So, it won't be a surprise if POCO blossoms into a full portfolio player eventually, selling phones in every segment. In doing so, POCO will have given Mi enough of a push to enter the higher segments too, thereby maximising the companies overall net revenues. So, Snapdragon 660 at ₹10,000, anyone?