Two years ago, Xiaomi seemed untouchable. The Beijing-based startup had unseated Apple as the top smartphone maker in China, and the success of its strategy—high-end devices sold at ultrathin margins—helped it reach a $45 billion valuation. But in 2015, Xiaomi faced a slowing Chinese market and powerful new rivals such as Huawei Technologies. By the end of the year, Xiaomi had sold just 70 million mobile devices after initially forecasting 100 million.
Now the company is working to expand its offerings, both to generate new revenue streams and to prove that it’s more than just an iPhone rival. In March, it released a smartphone-controlled rice maker that can automatically calculate cooking times. Though it might come off as a novelty product, the device is part of a much larger plan: to build out an Internet-based ecosystem that connects a wide range of Xiaomi products. For example, the company’s critically lauded Mi 5 phone enters Do Not Disturb mode if its owner falls asleep while wearing the Mi Band fitness tracker.
Xiaomi has invested in 55 different companies that are designing and manufacturing more of these products—everything from smart bicycles to air purifiers—which are being released under the Mi brand. (Xiaomi makes its own phones, TVs, and smart routers.) "Think of it as almost incubating a bunch of startups," Xiaomi global vice president Hugo Barra told Fast Company last fall. "We fund them, give access to capital, supply chain, a design team, give them mentorship from senior engineers. [Then consumers] can control these products together. They’re all part of the same family."
Milestones A report on the global wearables market by research firm IDC put Xiaomi in third place, after Fitbit and Apple, with a 260% increase in shipments in Q4 2015.
Challenges Xiaomi started selling devices in the thriving Indian market in 2014, but Apple recently surpassed its sales there, partly due to lower-priced iPhone 6’s and 6s’s.
Foster City, California–based Gilead Sciences is the leading manufacturer of lifesaving HIV treatments: Its HIV–prevention drug Truvada was one of the best-selling pharmaceuticals of 2015, and in April, the FDA approved Descovy, a combination pill that has fewer side effects than other drugs and also lets patients take fewer doses. "With each new therapy we introduce, Gilead aims to significantly improve upon the existing standard of care, even if that standard of care is our own product," says Norbert Bischofberger, chief scientific officer and executive vice president of R&D.
But Gilead’s results outside the HIV field have been more mixed. In March, a federal jury ruled that Gilead must pay $200 million in damages to pharmaceutical giant Merck because Gilead’s successful Sovaldi and Harvoni hepatitis C treatments infringe on two Merck patents. The ruling is expected to give Merck a boost in commercializing its own hepatitis C drug, Zepatier, a reportedly more effective (and significantly less expensive) alternative to Gilead’s offerings. Meanwhile, another drugmaker, AbbVie, has touted high cure rates for its new hep C drug.
To further diversify its offerings, Gilead secured a $1.2 billion deal in April to acquire a division of Cambridge, Massachusetts–based Nimbus Therapeutics that makes a treatment for the liver disease nonalcoholic steatohepatitis. But Gilead—always looking for a strategic leap over its competitors—also hopes Nimbus’s research will unearth the next balm for conditions that stem from hep C.
Milestones In January, Gilead’s longtime CEO John Martin stepped down, handing the position to chemist turned COO John Milligan. Martin will continue to serve as executive chairman.
Challenges Gilead halted testing of its blood-cancer drug Zydelig in March after multiple patients died during trials.
As Netflix, Twitter, and other high-profile companies adopt more-generous parental-leave programs, the digital-design company Ustwo is going even further: It’s pressing its entire industry to change its policies. In March, the U.S. division of the London-based agency—best known for creating the award-winning 2014 mobile game Monument Valley—launched the "Pledge Parental Leave" campaign, which is already having a major impact on the design world. More than two dozen firms, including Ideo and Wolff Olins, have signed on, agreeing to offer at least three months of fully paid parental leave with uninterrupted medical coverage, along with six months of guaranteed job security for new parents. (Firms must also make their policies public.) "[Hiring] talent is increasingly competitive, and people are looking to work for companies that actually care," says Ustwo co-owner Julian Ehrhardt. "I had my first kid in London and then my second in the States, and the contrast was quite a shock."
The campaign started for a simple reason: One of Ustwo’s New York employees got pregnant, and the U.S. team started thinking about how best to handle it. "We were saying how completely [screwed] up it was that so many agencies will offer nothing," recalls Casey Hopkins, Ustwo’s head of marketing. The team put together a pitch email, and "within 10 seconds we had our first company on board," says Ehrhardt. He wants the pledge to catch on throughout other creative fields. "We hope that anyone who’s on the wrong side of this situation will say, ‘What the hell are we doing? All our competitors are doing this.’ "
Milestones This summer, Ustwo will release a soundtrack to the Monument Valley game, which was downloaded 21 million times in 2015.
Challenges The company has yet to replicate Monument’s commercial success, although as a full-service firm it’s less reliant on games than companies like Zynga are.
Milestones Taking a cue from Uber, Disney is introducing surge pricing for certain one-day tickets at its theme parks to reduce overcrowding on popular days. Prices could reach as high as $124 at peak times and fall to the usual $95 when demand is less.
Challenges In early April, Walt Disney Co. COO Thomas Staggs said he would leave the company by the end of the year, stunning many who had considered him the successor to CEO Bob Iger.
Milestones Turner Sports signed a two-year deal with Snapchat in March to join its exclusive list of content partners. Under the agreement, Turner will create Live Stories from athletic events that it broadcasts, including NCAA basketball.
Challenges Ratings for the NCAA men’s basketball Final Four matchups—broadcast on TBS—were down 34% from last year.
Milestones As part of an effort to invest in scientific and social innovation (rather than just tech), the incubator will fund a five-year study on "basic income," the concept that the government should pay everyone a living wage.
Challenges In April, a cofounder of Cruise Automation—a YC startup that had agreed to be acquired by General Motors for a reported $1 billion—sued for half of Cruise’s equity, potentially stalling YC’s biggest exit to date.
Milestones After securing licensing deals with Sony Music and Universal Music Group, the streaming platform launched SoundCloud Go, a $9.99-per-month subscription service designed to compete with Spotify and Apple Music.
Challenges Apple is partnering with the DJ–focused music-sharing site Dubset, which will give a significant boost to one of SoundCloud’s biggest rivals.
Milestones The popular Tokyo-based messaging service reversed its position on letting outsiders in: This summer, it will open its API to developers looking to build chatbots or automated services for Line’s app.
Challenges The Indonesian government ordered Line, which has lost significant ground to Facebook-owned WhatsApp, to remove same-sex emoticons from its platform—and the company complied, angering many users.
Milestones The Moscow-based software-security company recently shared news that it had successfully identified and thwarted three Russian hacking groups that had been using malware programs to steal millions of rubles from banks—in some cases, by breaching ATM systems.
Challenges Hacking keeps evolving on multiple fronts: In a study published in February, the lab revealed that the amount of malware programs designed for smartphones tripled in 2015.
Milestones The retailer has revamped its coupon app, Cartwheel, and announced that starting in 2017 it will invest more than $2 billion a year to improve its restocking systems and drive online sales, which have lagged behind other big retailers. (Just 3% of its sales come from e-commerce.)
Challenges CEO Brian Cornell acknowledged in a meeting with analysts that customers are often "underwhelmed and disappointed" by low stock and subpar customer service.
Milestones The high-end Italian-food marketplace—which has locations around the world and recently opened outposts in Munich and São Paulo—is moving forward with plans for Eataly World, a 20-acre, 25-restaurant theme park-like complex in Bologna, Italy, that is set to open mid-2017 (to the dismay of some local residents). The park will build on the "farm to fork" idea, complete with workshops, on-site livestock, and food labs.
Challenges Starbucks has announced plans for a 20,000-square-foot coffee and food market—called the Roastery—in New York City’s Meatpacking District, not far from Eataly’s flagship location.
Milestones Following the successful February launch of "View in My Room"—a tool that lets users employ their phone’s camera to see virtual images of products in their dwellings—the home-decorating site opened its API to retailers, including Shopify users.
Challenges After expanding to Japan and Australia, Houzz is entering the
$7-billion-a-year Singaporean home-renovation market, where it will face a very similar (and popular) local startup, Kluje.
Milestones The company announced plans to purchase more satellite capacity in an effort to upgrade connectivity on 10 airlines that use its Wi-Fi service.
Challenges The move came after client American Airlines took Gogo to court over exceedingly slow Internet speeds. (The suit has since been dropped.)
Milestones In April, News Corp launched Heat Street, a Libertarian-leaning site that its editors describe as having "no safe spaces."
Challenges Revenue at the media giant fell 8.1% year over year to $1.4 billion in Q2, marking a fourth straight quarter of losses.
Milestones In March, the Dutch industrial innovator announced the Philips Hue white ambiance, a line of LED smart bulbs that come with a detachable wall-mounted dimmer switch.
Challenges The U.S. government halted the sale of Philips’s Lumileds lighting division to Chinese investor GO Scale Capital after a regulatory committee raised concerns about selling technology to a Chinese company. (GO Scale is reportedly planning another bid.)
Milestones The beauty subscription service is now selling its own products, starting with Arrow, a line of sweat-proof makeup.
Challenges Citing a downturn in the market, newly solo CEO Katia Beauchamp—co–CEO Hayley Barna departed last summer—cut 15% of Birchbox’s staff and shut down its Canadian operations.
Milestones Zappos signed its first-ever athletic endorsement, with former Notre Dame football player Ronnie Stanley. Stanley will promote Zappos, most likely on its website, in return for an undisclosed amount of store credit.
Challenges Following CEO Tony Hsieh’s adoption of the radical management process Holacracy, 18% of its workforce has left the company.
A version of this article appeared in the June 2016 issue of Fast Company magazine.