Xiaomi Loses Hugo Barra As Company’s Smartphone Market Share Falls

As I read that the most prominent global executive at Chinese smartphone maker Xiaomi Inc. Hugo Barra has left the company citing health concerns, I could almost feel the pain that Xiaomi’s founder Lei Jun must have experienced. 

This is the third and perhaps most ominous senior executive departure the Chinese smartphone maker has suffered in a short four-month period.

In October, a former editor-in-chief of Sina.com hired by Xiaomi two years ago to help revamp its content platform Chen Tong left to join Phoenix New Media. Earlier this month, Zhang Jinling, a vice president at Xiaomi, joined Baidu Inc. as chief financial officer of Baidu Capital and Baidu Waimai.

As one Chinese saying goes: When the tree falls, the monkeys will scatter. Conditions at Xiaomi are not that dire, but the sense of instability is palpable as the company revamps efforts to regain lost ground in the smartphone market.

In the third quarter of 2016, Xiaomi’s market share in China’s smartphone sector fell to 8.7% from 15.9% a year ago. Outside of its main smartphone business, Xiaomi is struggling to secure an edge in other segments including smart devices and wearables.

Xiaomi last raised US$1.1 billion in December 2014 at a valuation of US$45 billion, making it one of  China’s most promising "unicorns." The company has not raised new financing for two years, an extremely long pause for technology start-ups in China.

Xiaomi has repeatedly said that it has ample cash and has no need to raise additional capital. Chinese media reported that some Xiaomi investors are seeking to exit their shares by selling via bank arrangements at much lower valuations, though the company denied such reports.

In addition, Hugo Barra’s resignation letter published on his Facebook page highlights the sacrifice one makes when working in highly polluted Beijing. Barra said that it has "started affecting my health", without directly pointing to pollution and smog that constantly envelop the Chinese capital.

Here is Hugo Barra’s letter on Facebook:

THANKS FOR A GREAT 3.5 YEARS, MI FANS — When Lei Jun and Bin Lin came to me nearly four years ago with the opportunity to help turn a young rockstar startup into a global player, I embarked on what has been the greatest and most challenging adventure of my life. I moved to Beijing, 6,500 miles out of my comfort zone in Silicon Valley, to build from scratch a startup team within a bigger startup. This journey has been nothing short of spectacular in every way, and I can proudly say that Xiaomi Global is the first baby I helped bring into the world :)

But what I’ve realized is that the last few years of living in such a singular environment have taken a huge toll on my life and started affecting my health. My friends, what I consider to be my home, and my life are back in Silicon Valley, which is also much closer to my family. Seeing how much I’ve left behind these past few years, it is clear to me that the time has come to return.

As I thought about this late last year, I concluded that Xiaomi is in a very good place on its global expansion path, and if there was ever going to be a good time for me to come back home, that time is now — when I can confidently say our global business is no longer just an in-house startup. We turned India from a dream into Xiaomi’s largest international market with $1 billion in annual revenues, faster than any company in India’s history. We expanded into Indonesia, Singapore, Malaysia, and more recently 20 other markets including Russia, Mexico, and Poland. We teamed up with Google to launch our first official product in the US, and with our successful debut at CES 2017 — where we won 3 prestigious awards — the world now sees that Xiaomi is a global player changing the tech industry through our simple promise of bringing innovation to everyone.

More importantly, we now have a team of some of the most remarkable and enthusiastic people I have ever worked with, and leaving them all behind is without doubt the most difficult part of stepping away. At the same time, I know I’ll be leaving them in very good hands. Xiaomi now has a strong, globally-minded executive team who will continue to drive the momentum we began together.

I want to thank the Xiaomi founders, and particularly our CEO Lei Jun, who has been a mentor and a friend. It has been both humbling and uplifting to work with a man whose vision is redefining the role technology plays in all of our lives, and the role the China tech industry plays in the world. As a friend and shareholder of the company, I am honored that he has been very supportive of my transition and has asked me to remain an advisor to Xiaomi indefinitely, as we continue to extend our reach around the world.

For me, as for many people in China, the Spring Festival brings new beginnings, and I will be transitioning out of my role at Xiaomi in February after Chinese New Year. I will take some much-needed time off before embarking on a new adventure back in Silicon Valley.

To my Xiaomi colleagues in China and India: as I leave our home in Beijing and Bangalore, please be assured that I will remain your loyal and grateful Mi fan 虎哥. I will be watching diligently from the sidelines and rooting for you guys all the way! And, of course, a very special shout-out to all our Mi fans around the world, who have won my heart for life!

Stay in touch guys :)

I’ll be seeing you,


In a comment to Barra’s post, Bin Lin, co-founder and president of Xiaomi, wrote:

When Hugo joined us 3.5 years ago, we started an amazing adventure to turn Xiaomi into a global player. We have come a long way since, and I couldn’t thank him enough for contributing so much to Xiaomi’s journey. As much as we would love to have Hugo stay with us in Beijing for a much longer time, we understand his personal challenges and wish him all the best in his future endeavors. I’m also looking forward to working closely with him in his new role as advisor to Xiaomi.

Xiang Wang, Xiaomi Senior Vice President, will lead our entire global efforts moving forward. We have ambitious expansion plans for 2017 and are confident in Xiang’s leadership to take our global business to even greater heights!

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Nina Xiang is the co-founder and managing editor overseeing editorial content and product development at CMN. Before founding CMN in 2011, Nina worked at BusinessWeek magazine in Beijing and Institutional Investor magazine in New York, writing about business and financial services. While in New York, she also served as part-time correspondent for Shanghai's financial television channel, China Business Network, as well as China Radio International, China's national English-language radio network.