China Mobile hopes to sell 30m of the smartphone maker's handsets this year

Smartphone maker Xiaomi Corp unveiled a new handset with China Mobile Communications Corp on Aug 25, as the company steps up efforts to expand its offline retail channels.

China Mobile, the country's largest mobile telecom carrier by subscribers, says it hopes to sell 30 million Xiaomi handsets this year, signaling a boost for the smartphone maker, which is wrestling with declining shipments and mounting competition from rivals such as Huawei Technologies Co Ltd.

Priced from 899 yuan ($135; 120 euros), the Redmi Note 4 will be on sale at China Mobile's 20,000 offline stores and more than 100,000 retail partners' stores.

Lei Jun, the CEO of Xiaomi, says his company has sold more than 110 million Redmi smartphones, a brand known for its cost-effectiveness. "The new phone is our latest effort to offer a quality smartphone that everyone can buy," he adds.

The move come at a time when China's online smartphone sales appear to have hit a ceiling, and market players are banking on bricks-and-mortar retail partners for growth.

James Yan, research director at Counterpoint Technology Market Research, says it's highly possible to achieve the sales target, given China Mobile's sprawling offline presence.

"Telecom operators' retail channels account for 30 percent of China's total smartphone sales, and more than half of that is handled by China Mobile," he says.

The new phone's design and sophisticated body, better than most of Xiaomi's previous phones, will also help boost sales, he says, adding that the Beijing company's supply chain partner, Wingtech Group, can ensure an abundant supply of the new handset.

Last year, China Mobile and Xiaomi unveiled the first Redmi Note, with total sales hitting 27.5 million units. However, at the time, Xiaomi was growing rapidly.

The partnership between Xiaomi and China Mobile will also be expanded to Southeast Asia, as China's smartphone market is reaching saturation point and local players are eyeing overseas markets for opportunities.

Li Huidi, vice-president of China Mobile, says his company is making investments in India and Southeast Asian nations where Xiaomi has established a presence.

"We'll partner with hardware vendors such as Xiaomi to bring more domestic devices to overseas markets," Li adds.

He did not disclose details, but analysts say it's likely China Mobile will leverage its overseas investments or foreign partners to build retail channels for Chinese handsets.

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