Mixing at Scale

Yesterday, Xiaomi announced the Mi Mix. MKBHD has, as usual, an excellent hands-on summary of the news: 

A brief bit of background on Xiaomi, if you haven't heard of them, is in order. It's a relatively young Chinese electronics manufacturer, which has risen rapidly in prominence because they sell their phones at essentially zero margin (this will be important later). They also control pricing by only building phones when there is demand, meaning there is rarely enough supply of their devices — many models are often sold out for months at a time (ditto). They've even poached some of Google's most senior Android product folks in order to build Android-based devices with a level of engineering & attention to detail not unlike Apple's. With a strong team, lots of venture capital backing, and more than a little bit of grit, they've become the dominant manufacturer in their home market, and are rapidly expanding into developing markets around the globe. It's not exactly surprising that they're ready to show off their engineering chops a bit, with a splashy, envelope-pushing device.

Their newest flagship (though billed as a "concept", it replaces the one-month-old Mi 5s Plus) is the aforementioned Mi Mix — a phone which is simply incredible, and looks straight out of a near-future sci-fi film. The display covers almost the entirety of the phone's face, and the chassis is made out of a highly polished ceramic. It's hard to believe this phone can even be made in 2016, much less sell for just over $500 (U.S. pricing has not been announced yet). Since it's likely being sold break-even, or even a slight loss, we know it costs close to three times as much as an iPhone does to make, which is incredible. After factoring in engineering & marketing costs, this phone will certainly cost Xiaomi a fair amount of money. Then again, as a venture-backed growth-stage startup, they can afford to take the hit. It's likely that it won't even cost them that much because of a few words in the press briefing — "limited availability."

When Apple says that there's limited quantities of the iPhone, it's typically a sign that they are going to sell every phone they can make, and then some. With a massive global logistics operation at full tilt, just over 13 million iPhone 6s were sold over the first weekend of availability, despite selling out nearly everywhere (Apple did not release first-weekend sales numbers for the iPhone 7). Each year, over 200 million iPhones are manufactured and sold — a daunting task unprecedented in human history. Nothing of equivalent complexity has ever been built in numbers anywhere close. For some excellent writing about the challenges of making the iPhone at scale, check out Greg Koenig's excellent, thoroughly-researched blog posts on how Apple manufactures at scale — in particular, his post on ceramic iPhones inspired this one. The difficulty of pulling this off starts to explain why my iPhone 7 doesn't have an incredible edge-to-edge display, or a slick hidden speaker & proximity sensor, or any number of the amazing design touches in the Mi Mix. 

Xiaomi's history of building their products in extremely small batches, and allowing them to be 'sold out' on their web store for periods of several consecutive months offers clues to how they've managed to pull this off. It's actually fairly simple, in that they haven't, and they've pretty much told the world that fact. It's repeatedly described as a "concept" with "limited availability" in their statements to the press, and they clearly don't intend on selling anywhere near the numbers that their mainstream devices do. So far, they've taken just over 800,000 reservations according to the Mix' product page, and I'd be willing to bet many of those customers won't actually be able to convert a reservation to a product order.

The Mi Mix is a feat of engineering, that is not in doubt. As a product, it's a triumph, and if I were a Hollywood prop master I'd be struggling mightily to get my hands on a few for any sci-fi project in the works. But it's certainly not an example of what the iPhone 7 should be. It's doubtful that the iPhone 7 even could look like this, at least not if anyone wanted to actually buy one and use it. The Mi Mix is a peek into the future of the smartphone, a glimpse at what every manufacturer — yes, even Apple — has sitting under a black cloth in their design & prototyping shop. But it isn't more than that. I'll likely never see one in person (but if you're willing to let me play with yours, I'll buy you a beer). A few years from now, it'll be a curiosity because it pushed towards the inevitable all-screen future. We've been working towards it for some time. But hey, at least Xiaomi is first with a bezel-free phone, right?

The tweet that inspired this post: