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233Xiaomi is a Chinese electronics and software company that was founded in 2010 by Mr Lei Jun In 2017 Xiaomi was ranked as the world's 5th largest smartphone company 1 Despite smartphones it designs develops and sells mobile apps laptops and wide range of consumer electronics like TV power banks headphones watches electric bikes and scooters etc 2 One of the main reasons why Xiaomi became the shining star of phone market is its strategy of implementing open innovation though user interaction But let's start from the beginning to understand how Xiaomi came to this strategy Figure 1 Xiaomi s users and service revenue 2013 2014 3 In 2010 the phone market was already matured and competitive Xiaomi as a young start up needed to attract top suppliers of critical components for its smartphones However most of the large component suppliers had tailored their factories to existing customers For example Apple had already sourced its components from 90 out of 100 global suppliers by that moments 4 Moreover other Chinese mobile companies earned reputation of cheap imitators of Apple products Those companies ordered from suppliers too many handsets than they could sell and eventually had to go out of the business Therefore at the beginning Xiaomi was rejected by 85 out of 100 top suppliers and it had to bolster its credibility somehow
When talking about open innovation in China none has done a better job than Xiaomi Compared to others the users of Xiaomi are apparently more engaged into the development phase of Xiaomi product While enjoying the rights to evaluate judge and criticize Xiaomi s users are also bearing responsibilities c Users motivation to contribute One question asked by many people is how Xiaomi gets its users to help them willingly In fact this is not just about Xiaomi In many other area we can see cases where people share their views happily with strangers without asking for any reward Github for example has many loyal users contributing their code and projects willingly And there are people working on the same project to help improve its performance For example regular users will help test the system and give feedback on the user interface of the smartphone system and high level users with system development background would be able to give suggestions on system improvement or module design