Xiaomi is in no hurry to go IPO and litigation can be one of the reasons

Promising startups have many examples of unsuccessful IPOs - you can take GoPro or a number of other large projects. After the placement of shares, their value dropped significantly in the very near future. Against the background of such a trend, the statement by Xiaomi Vice-President Hugo Barra that the company is not going to make an IPO sounds quite logical.

Recently, Xiaomi could not justify analysts' forecasts of sales by 12%, selling 70 million smartphones, losing on this indicator to manufacturers such as Lenovo and Huawei. But the problems with IPO would not only be in the potentially unwarranted hopes of investors and analysts - Xiaomi was repeatedly criticized for copying the intellectual property of other companies. One of the first Xiaomi accused of copying the design of devices and software Apple. Apple's senior vice president of design, Jonathan Ive, even raised this issue during one of the Vanity Fair Summit press conferences.
')

“I do not consider copying our decisions to be a flattery, but I perceive it as a theft. I want to be honest, it seems to me that this is a banal theft and laziness. And I don’t think such an approach is normal, ”Jonathan Ive told the Vanity Fair Summit.

Knowing Apple’s tough position on upholding its own intellectual property rights, we can expect the company to sue for copying the design of its own devices. What can I say - even the Xiaomi presentations were copied from those of Apple.



With a fairly low margin on Xiaomi products, investors would be extremely concerned about the potential payments to Apple, which can start from a few cents and reach a few dollars. In this case, the company's profits from the sale of its own devices, some of which could be found guilty of patent infringement, would be realized with almost zero profit. And the chances of winning Apple would be particularly high immediately after Xiaomi attempted to enter new markets.

Naturally, all this would also have affected the value of the shares after the IPO, which would rapidly fly below the primary placement mark. All of this indicates Xiaomi’s well-intentioned desire not to make an IPO in order to avoid potential problems.