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Mar 01, 2017 11:57 AM EST

Xiaomi’s Own Processor For RedMi Note Doomed To Fail, May Not Upstage Apple, Samsung [REPORT]

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Apple, Samsung and Huawei are the three smartphone manufacturers that create their own processors for their products. Xiaomi has decided to enter the fray recently. Do they stand a chance against the big three?

China's smartphone startup partnered with Beijing Pinecone Electronics (owned by Huawei) for their first SoC (system-on-chip), the Surge S1. Last month, Reuters reported that the in-house processor is intended for the RedMi Note series, Xiaomi's mid- to low-priced smartphone models.

Xiaomi's processor is a 64-bit capable, octa-core mobile chipset with quad-core Mali-T860 GPU. It is touted by the company as a processor with "upgradable baseband" and support for VoLTE (voice over LTE) HD calls. Other features include diminished static and background noise and stronger security against false base stations, according to Mashable.

The Xiaomi Mi 5c is the company's first smartphone powered by the Surge S1. The processor was launched alongside the handset's new version, which has a 5.15-inch 1080p display, 3 GB of RAM, a 2860 mAh battery, a front-facing fingerprint scanner, a 12 MP primary camera and an 8 MP secondary snapper.

With the Surge S1, Xiaomi intends to directly compete with Qualcomm's Snapdragon 825 and MediaTek's P20 and P10. Xiaomi's chances, however, appear to be bleak.

Processors are vital. They are responsible for a device's speed, battery performance and entire function, but sales don't just depend on chipsets.

A report from Fortune pointed out that the company's revenue in 2015 was stagnant. Smartphone shipments last year were so poor that they chose to keep the exact figures from the public.

Xiaomi's attempt to delve into smart household products isn't looking good either, and executive Hugo Barra's departure from the company didn't help matters either. Barra was appointed to expand Xiaomi's reach beyond China but left his post earlier this year for Facebook.

Xiaomi isn't just competing in international markets; it also faces tights rivals in its home country. Chinese companies have copied Xiaomi's budget-friendly components and the firm is probably too late to win back their dwindling followers who are now siding with Oppo, Vivo and Huawei.

A study by market research company IDC found that Xiaomi and Lenovo were ousted from the top five largest smartphone manufacturers last year. The two were replaced by Oppo and Vivo, with Samsung, Apple and Huawei reigning in the top three, respectively.

Shobhit Srivastava, an analyst at marketing research company Counterpoint, believes that integrating its processor with their smartphones will boost Xiaomi's earnings. He said that processors account for 35 percent of the billing of material and on mid-range devices, could be responsible for 50 percent of the components' price.

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