A group of startup companies from around the world showcased their hardware technology at a demonstration event in San Francisco on Tuesday, with intriguing looks at robotic suitcases, autonomous robotic delivery, and biometric bike locks. But the real news surfaced when a key investor in the hardware development community chose the occasion to issue a warning that Chinese manufacturers could be poised to disrupt the U.S. market in a major way.
The event was the HAX Demo Day, which featured 13 startups unveiling hardware products from the HAX 111-day development program in Shenzhen, China. HAX is respected in the tech community for their investment in startups and they have successfully brought over 90 companies into the hardware ecosystem.
This year’s crop of hardware startups offered new twists for old problems. Tired of hauling your overstuffed luggage through airports? Nua unveiled a smart suitcase system that uses sensors and mobile apps to automatically follow behind as you wearily shuffle towards your airplane gate.
Frustrated by the difficulty of getting simple items delivered quickly? Dispatch has created a fleet of small, autonomous vehicles designed for bike lanes and sidewalks. With the brand name Carry, these vehicles are initially being deployed in college campuses as a test market and can deliver up to 100 pounds of goods.
Troubled by bike thieves who continually manage to steal your expensive two-wheeler? Grasp has designed a lock that uses an Android or iOS app to record fingerprints and provide a new layer of protection for their battery-powered, steel alloy device.
The demonstrations even included a farm stack designed to grow edible insects that can be stirred into your morning breakfast as a valuable source of protein. Livin Farms introduced a desktop hive that lets users grow, breed, harvest and (gulp) eat mealworms.
However, despite the impressive advances in hardware technology that the assembled HAX companies showcased this week in San Francisco, Benjamin Joffe delivered a clear message that was hard to miss: China is coming.
Joffe, who is a leading expert on Asia technology and a pioneer in the hardware space, described what he called the “Xiaomization” of the device industry. According to Joffe, the Chinese smartphone giant Xiaomi has begun to branch out into other countries where they can sell a variety of hardware products at prices far below the competition.
There are signs that they will soon implement this strategy in the U.S. Just last month, Xiaomi president Bin Lin disclosed during a conference organized by the Wall Street Journal that his company is “considering” selling its popular Mi Note and Mi Note Pro smartphones in the U.S.
This could significantly disrupt the U.S. market for no other reason than Xiaomi already carries significant sales clout. During China’s largest online shopping period (November 11-Singles Day), Xiaomi generated $188 million in sales, including $16 million of product in the first twelve minutes.
It would be a mistake to label Xiaomi as merely a smartphone maker. The company has successfully introduced 4K televisions, air purifiers and home routers.
The next time you see a Segway (standup motorized scooters often used by security personnel at airports or tour groups in cities), you’ll be looking at another Xiaomi product. Xiaomi’s portfolio company Ninebot acquired Segway earlier this year and has since introduced a mini-self balancing scooter of its own. The price is $320 (far below the $6,500 Segway).
Xiaomi has also been noticeably aggressive in the camera market. The company makes a compact HD video camera as an alternative to the widely popular GoPro. And while GoPro cameras start at $130, the Xiaomi model retails for less than half ($64).
Joffe’s point is that despite advanced products that HAX startups and large manufacturers are generating, Xiaomi and other Chinese companies are getting ready to launch an assault that could completely disrupt the technology device pricing model. With the disruption we’ve already seen in major industries such as transportation (Uber) and hospitality (Airbnb), 2016 could be the year when hardware encounters the same fate.