Who will gain from Xiaomi's loss?

Xiaomi, the third-largest smartphone maker in the world, has sold 800,000-900,000 smartphones in India in the past year. While it is still not among the top five in India, its cheap pricing strategy has helped it penetrate the Indian market faster than any of its rivals.

Putting a shadow over its future in India, the Delhi High Court has restrained Xiaomi from selling handsets that run on technology patented by Ericsson in the country. If the order, which came earlier this week, stays effective, then Xiaomi would lose the fastest-growing smartphone market in the world.

The ban on Xiaomi would essentially emerge as an opportunity for Samsung and Motorola, which could improve their market share. Besides, home-grown Micromax, Karbonn and Xolo will also benefit.

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• If the Delhi HC order stays effective, Xiaomi would lose the fastest growing smartphone market
   
• Its flagship device Mi4 was to hit the Indian market late this year, after being a huge success abroad

About 72 million handsets - smartphones plus feature phones - were sold in India in the July-September 2014 quarter, according to IDC. Notably, as much as 70 per cent of the sales comprised feature phones. On Tuesday, during its regular flash sale on Flipkart, 75,000 of the newly-launched Redmi Note phones were sold. Prior to this, the company had sold an estimated 800,000 devices of Redmi 1S and Mi3 through its exclusive partnership with Flipkart. The company's flagship device Mi4, which has been a huge success abroad, is slated to hit the Indian market late this year.

This is not the first time a handset maker has got into a patent tussle with Ericsson. Micromax, India’s second-largest smartphone maker, has gone through a similar dispute. In November, the Delhi HC had asked Micromax to pay one per cent royalty to Ericsson for its patented technologies in its mobile handsets.

While Xiaomi has always received a warm hug from consumers, it has faced challenges as well. In October, Indian Air Force asked its personnel and their families not to buy Xiaomi smartphone because of security concerns. Following this, the company said it would set up a data centre in India to store local user data. Xiaomi also plans to make phones in India in the next couple of years. However, if the ban stays, the company might have to shut shop here.