Xiaomi wants to expand its smartphone business to the United States, but there is a lot to be done to please the world's most exacting customers. For Xiaomi to be able to make a dent in the highly competitive U.S. market, it has to make sure it has more control of the user experience.
One of the steps Xiaomi is reportedly trying to take to ensure the creation of devices that lives up to its own standards and the expectations of American consumers is the development of Xiaomi's own in-house mobile chip.
A number of Android manufacturers have taken this route, notably Samsung, whose Exynos 7420 saved its flagship smartphones from the overheating issues plaguing the HTC One M9, which runs on Qualcomm's Snapdragon 810, which is why, if Xiaomi develops its own processors in-house, it can save itself a lot of trouble arising from problems it has no control over as well as a lot of resources too.
The latest rumors about Xiaomi's rumored plans to develop its own chips stem from a report by Guangzhou's 21st CenturyBusiness Herald (via DigiTimes), which cites the secretary-general of the Mobile Phone China Alliance, who says that Xiaomi has acquired the full rights to all the core ARM licenses, which the startup can use to develop new chips that can be taken to market by 2016.
The report follows ARM's own announcement during its quarterly earnings call in July that it has secured a partnership with a leading Chinese manufacturer, allowing that manufacturer to use all of ARM's kernels to develop chips. Although ARM has declined to mention the name of that manufacturer, it is largely believed to be Xiaomi.
Further back in 2014, the Xiaomi-owned Pine Cone Electronics worked with Leadcore Technology, a leading Chinese chipmaker based in Shanghai, to develop the LC1860 processor that is now running under the hood of its low-end Redmi 2A, which proved lucrative for Xiaomi as the smartphone, which was priced at 599 yuan or around $96 at launch, became the bestselling device in Xiaomi's Redmi 2 line.
The company was able to price the Redmi 2A so low because it did not have to buy the Qualcomm or MediaTek chipsets that are running on most Android smartphones. Industry insiders note that a Qualcomm processor normally costs $8 apiece, but Xiaomi was able to cut the cost of its Redmi 2A chips to $4 apiece.
Nonetheless, it is not likely we'll find Xiaomi's own chips powering its high-end smartphones first. Like Samsung, Xiaomi will probably fit its chips into its low-end and mid-range models first to test how they fare in the market before putting them into their flagship phones next.
