Xiaomi Mi Band & the rise of affordable wearables
This is the second in a series of posts about Edge’s recent visit to China.
Asked to name the top sellers in wearables, names that roll off the tongue might be Fitbit, Jawbone, and the Apple Watch. Yet the third highest-selling wearable in the world is none of the above — in 2015Q2, sitting just behind Fitbit with 4.4M bands and Apple Watch with 3.6M units sold, the Xiaomi Mi Band sold 3.1M devices. So where did the Mi Band come from, what’s driving its growth, and what are the implications of its popularity? We’ll cover our thoughts on these topics in this post.
Let’s start with Xiaomi, the maker of the Mi Band. Xiaomi was founded in 2010 in Beijing, and was selling 70.8 million smartphones a year by 2015. Now valued at $45B (although perhaps shakily), Xiaomi didn’t open its first physical store until 2015, relying on its insanely popular online flash sales. Today, their profits are increasingly derived from their app marketplace, phone accessories, smart home gadgets, and many other consumer electronic devices.
Xiaomi released the Mi Band in July 2014. The Mi Band has a silver core tracker that is inserted into a wristband and comes with the standard features consumers have come to expect in wearable devices: activity tracking, sleep tracking, and heart rate measurement. (Only the slightly more expensive version of the Mi Band has non-continuous heart rate measurement, meaning the user chooses when to measure heart rate in the app.)
So then why is the Mi Band so popular? Where the Mi Band differentiates itself is on price and battery life. Without heart rate sensing, it costs 69 RMB or roughly $10.66, and with heart rate sensing, it costs 99 RMB or roughly $15.29 (now listed as $14.99 on their site). The battery lasts on average 30 days. You can see how this compares to other popular wearables in this chart:
This June, Xiaomi announced the next generation of the Mi Band, with a 0.42” OLED screen that navigates between three different screens for time, steps, and heart rate data. The Mi Band 2 is priced out 149 RMB or roughly $23.28.
We believe the Mi Band and Mi Band 2 are important because they make it increasingly affordable for individuals to access their own personal wearable data stream. Xiaomi has now opened up online sales of the Mi Band in the US (although their website is currently out of stock) and plans to do so in other countries. And although not as top-selling, there are other similarly featured devices at sub-$30 prices, like the Misfit Flash, which tracks activity and sleep, running on a rechargeable 6 month coin battery for $29.99.
So what happens in a world where basic wearables are so affordable that they could be given away for free? What types of businesses could be built with the strategy of giving consumers wearables in order to do something useful with the data? And of course, what will incentivize consumers to keep wearing them? We’ve already invested in an amazing company called Data Minded Solutions that pulls in data from wearables and other connected medical devices and apps into dashboards with insights for providers treating chronic patients. If you’re working on a company answering these types of questions, we’d love to chat.