♪ xiaomi may be a new kid but the chinese startup is no longer so little. at five years old, they now rival apple and samsung in the chinese smartphone market. worldwide, it is still not a household name. former google executive hugo bharat intends to chain that -- change that. joining me today on studio 1.0, xiaomi president of global

--ations, hugo barbara barra. so great to have you here. hugo: my pleasure. emily: how is your chinese? hugo: coming along slowly. maybe next time, we can do it. emily: i will hold you to that. that is a big promise. i understand they call you tiger brother. how did you get that name? hugo: our ceo, a social media rockstar, superstar did a simple post and said hey guys, hugo is joining us from google, we have to give him a name. people went crazy. everybody started suggesting names. i had no say in it. i was communicated on my first day, by the way, you are tiger brother. emily: when are you going to start selling phones in the united states? hugo: i would tell you if i knew. but i don't. we don't have a set date yet. selling phones is a big step up.

it is a huge marketing undertaking. you know, building a smartphone brand. operationally it is complicated. you have to have after sales set up, customer support set up, and it takes a huge amount of work plus localizing the hardware. we are going to work our way to that, but we're not quite ready yet. emily: are you saying you will someday? hugo: of course. emily: what will it take? hugo: it is going to take having a team here, potentially a sizable team to manage the process operationally, certification, ongoing engineering help. emily: months away, years away? hugo: no less than a year plus away. emily: more than a year away. hugo: potentially much more than a year away. emily: you spent a long time at google. google is blocked in china, apps are blocked in china. is there a way forward for google in china? hugo: i don't know. it is a tricky issue. i do believe that it may not be the end of it. i personally don't think that it is the end of the road for google in china. purely thinking from the point of view of how useful google is and the fact that people in china are universally study

-- go to universities and study abroad. they depend heavily on google even despite the fact that it is blocked. that i just think at the end of the day, someone is going to figure out a way to solve whatever issues exist to bring all of this innovation to the people in china. emily: how satisfied are you with the pace of innovation? hugo: i'm quite happy. especially because i understand how hard it is to make progress. when you are literally supporting hundreds around the world, i think android is entering a new phase by expressing itself through some -- so many different screens and different types of devices. there is basically an entirely new and completely uninstall or -- completely unexplored galaxy of possibilities here. emily: google doesn't make money off of android. it isn't doing well in terms of mobile advertising. companies like xiaomi have built huge businesses off the back of android. do you think making android open was the right call for google?

hugo: i think android as an open platform is the only call google could have made on this. it would have been impossible to make the level of adoption would have seen from a close operating system. -- we have seen from a closed operating system. it just wouldn't go anywhere. plus, you would never be able to build such an amazing developer story. android is the best decision google ever made years ago. of course, the fruit of that will be around for many decades. emily: but how does google make money off of it? they pay apple billions of dollars to have google on the iphone. hugo: think of what would have happened if android wasn't open. for example, if the apps that were loaded on phones running some alternative version of android were mandated by someone. think about what that would mean for google. it means that people would not necessarily make a choice of which browser to use, which search engine to use. when you have a closed operating system that mandates behaviors, it is unfair. it would be unfair for google and anybody else. absolutely one of the best thing

that ever happened in tech in the last few decades. emily: do you think google would close android? put walls up around it? hugo: google would never do that. there is absolutely nothing that would convince larry to do such a thing. emily: larry handed over a lot of control. what is your relationship with sundar?rt deco -- with hugo: that was an amazing decision. he is capable, the most well-rounded executive at google. he is a great product guy. he is a great business guy. it frees up time for larry to think about what should google be 10 years from now, how do we think about artificial intelligence, how does it affect design? it is very hard to do both of those things of the same time. have ado you and sundar relationship now that you are at xiaomi, do you guys collaborate? hugo: we do. we are an android partner, first and foremost. we try to be in front of the pack when it comes to upgrading the operating system and using all the innovations coming from google. we spend time together every few

months or so when i come and visit. emily: would xiaomi build its own operating system? hugo: we wouldn't for smartphones or tvs, or these products. simply because it doesn't make sense to do that. we would much rather use that engineering horsepower building interesting services and capabilities on top of android that has value versus starting again. everyone who has tried has failed. despite having many times more resources than we would have as a startup, which we still are. so, we would not. emily: johnny ives referred to xiaomi's phone. he said you have stolen his design. how do you respond to that? ♪

emily: you were born and raised and brazil. you got into computers and made it to m.i.t. you were class president. hugo: you should blame my mom

for all of the above. she really is the one person who pushed me all along and still does by the way. emily: you founded your first company after college, a mobile speech recognition company that got bought by nuance communications. and that now powers apple's siri. hugo: there is some amount of code. we don't really know how much. it made its way to the software that powers siri today. emily: you joined google in london. you worked your way up through the ranks. what was that ride like? what was it like working for andy rubin? hugo: it was amazing. i worked for a few really amazing executives and mentors , and then of course andy, one of the most brilliant in tech ever, a man so incredibly knowledgeable and whose intuition about technology --

thinking years and years ahead -- it is completely unparalleled, so i was lucky to be in the right place at the right time. emily: how did you come across this company, xiaomi? hugo: it was started by the two primary founders, ben was a colleague of mine at google. he left to do something pretty ballsy and new. i tracked all of that very closely. it wasn't until a couple of years that he brought their second generation devices to google. it was when i powered the device on and played with it the first time that it dawned on me those guys were not joking around. emily: tell me your first meeting. hugo: it was a four-hour meeting which tends to be the case. very deep, involved discussions. he is that kind of guy. it was a dinner in beijing sometime in late 2012.

we spent time talking about everything from mobile to internet to brazil and cars. i found him to be one of the most fascinating people i've ever met. at the same level as someone like andy rubin. his ability to understand consumers, thanks so many years think so many years ahead, four hours flew by like 10 minutes. it was amazing. and this was a translated conversation. emily: he spoke to you in chinese? hugo: in chinese. and ben translated. it was a surreal but amazing experience. emily: you are a happy google employee, you are at the top of android, how do you decide to take this job? hugo: there was part of me that always wanted to try something. beyond that was a possibility was that xiaomi may be doing something that would have a

similar level of impact in the world of an android it's self -- android itself did. emily: how did larry take the news? hugo: larry reached out and was supportive, but at the same time trying to see if that was really what i wanted to do. at the end of the day everyone was supportive. in many ways i was leaving to continue what i had been doing for android. xiaomi, if successful, would become one of the most important partners for the android team. it was like i was still in the family. emily: what are the differences between working at a chinese tech company and google? hugo: there is a lot in between the lines in the culture. you have to be sensitive with what you say and who you say it in front of. xiaomi is an interesting mix of silicon valley work as hard as possible culture with the traditional chinese culture. uniquewhat makes xiaomi

from apple and samsung. hugo: xiaomi is a really interesting hybrid of things that you would see at apple, and absolute love for design and the culture of perfectionism. this is coming straight from our ceo. emily: is it a phone company, an electronic company, a software company? hugo: none of those. emily: is it an internet company? hugo: it is an internet company. that is the best way to describe xiaomi. we interact with our customers and users, or as we prefer to call them, our fans through the internet, through social media. we sell our products direct. we are the third largest e-commerce website in china. the largest pure play by miles. we design products, taking a lot of input from the community. probably about 50% of all of the new features and services we end up building as part of our software came from the community. you can pinpoint it down to one user's idea.

this is very unique. emily: you sell phones. high-quality phones basically at cost. but you make most of the money by selling services, right? emily: we think of -- hugo: we think of hardware as a platform. we think of our tvs and tv boxes as a platform. on top of that, we have a number of services and apps that we built that we have worked with partners to integrate. which do work as a monetization channel for us. we have an ecosystem of accessories and gadgets, which are products like power banks and headsets, but all sorts of other connective devices. we have an air purifier, we have an action camera, security camera. emily: how much money do you generate? hugo: just to give you an idea, this year we estimate we will have about 8 billion u.s. dollars in revenue -- $1 billion

in revenue from our service alone. emily: you are invested in 30 different startups. hardware and software companies, and they partner with you. what is the relationship there? what cut do you get? what cut to the developers or makers of these products get? hugo: it is a very unique model which i have not seen done anywhere else. the way it works as we help these companies get started. we will put the founders together, work together and build this. we will get them funded to start with, then we will leave them alone to operate independently. then we take the best products that they make, and we put our brand on those products, and we sell it from our e-commerce engine. job,ese guys do a good they will enjoy tremendous success. they ship about a million of these a month, which makes them

the small company the most popular fitness wearable devices in the world. emily: how is the money shared? hugo: the manufacture it with a contract manufacturer, which we help them connect with, then they pay those guys and they sell it back to us and make margin. emily: how much? hugo: it varies tremendously. we actually make good margins through these products differently through our products. they make some margins. we make some margins, but it is a good relationship. emily: what is the biggest revenue driver for xiaomi? hugo: our biggest revenue driver is probably phone. they still drive most profits today without a doubt. the trend over time is for our services strategy to really grow and become the main profit engine for the company. emily: international growth. where is it working, where isn't it working? hugo: we are taking it slowly. we are paying attention to how we need to change things.

we eventually made our way to india and indonesia, two very significant markets. india in particular. emily: your model is being copied to a certain extent. can you succeed where there is a micromax in india? hugo: our model is being copied left and right. both in china as well as other markets, including india and others. the way we respond to that is continue to evolve. companies that are copying us now are really copying xiaomi from a year ago. emily: how does xiaomi live up to a $45 billion evaluation? ♪

emily: xiaomi has been accused of copying. johnny ives accused xiaomi's phones as theft. he said you stole his designs. how do you respond? hugo: this copycat melodrama boils down to one edge on one particular phone model.

people said it looks like the iphone 5. i've been the first to say it does look like the iphone 5. the edge, by the way, is present in so many other devices. it was in many ways people projecting their bias against chinese companies on to us -- onto us. people could not bring themselves to believe that a chinese company actually could be a world innovator, could build amazingly high-quality products and sell them for less than half the price of a high-end apple or samsung device. i think that drama has quickly started to vanish. i would actually point out on the device that you have, there is nothing you can point to that resembled it. emily: you don't think it looks like the iphone 6 plus? hugo: it is white. emily: [laughter] hugo: how else does it look like the iphone 6 plus? emily: the criticism was the look and feel of the product in general. hugo: i don't think that is fair.

without a doubt, every smartphone these days kind of looks like every other smartphone. you have to have curved corners. you have to have at least a home button in some way. that is how interaction and design works. i don't think we can allow a company to take ownership of things that just are how they are. i think that if you look at what we have designed in the last 12 months, you will understand how much originality there is in what we do. to be honest, i think you are going to see a lot more happening in the opposite direction. people taking inspiration on what we do. emily: the ceo is often compared to steve jobs. he does not like that comparison, but he wears a black shirt. why does he do that? hugo: he's no longer wearing black shirts. emily: [laughter] hugo: he wears a blue button-down shirt. i think he has like 50 of those

because he wears them to the office every single day. one more thing was a joke. people took it way too seriously. we don't take ourselves seriously at all. when that keynote happened and and they said one more thing, the room exploded. emily: on a more serious note, it has been said the reason you are not rolling out phones in the u.s. yet is because of intellectual property issues. how protected are you if you do start selling phones in the u.s.? are you worried about patent law and potentially getting sued? hugo: of course we are always worried about patent licensing and intellectual property. and so on. every company in this industry has had to deal with that. there are two bank things that we are doing, which take time -- one is, systematically taking patent licenses around the world. if it is a patent, it needs to be licensed. that is what we are doing. it takes time. we talked to everyone we need to talk to. secondly, we are building our

own portfolio of patents for defensive purposes because you kind up at the half that. -- kind of have to have that. think of it as a war chest of sorts. we filed 2000 patents. which is actually a lot. we are acquiring patents. that is one of many factors that determines when we are ready to enter certain markets. emily: you and apple are kind of jockeying for the top spot in china. what is happening in china is the smartphone market is saturating for the first time. how worried are you? hugo: china has moved into the replacement market. meeting, people already have a phone, and every year they just want to buy a new phone. the interesting point is though that the replacement is actually -- the replacement cycle is actually coming down. people are more anxious to buy a new phone more often. there is a tremendous amount of room for us to grow even if the pie itself isn't growing. emily: would you ever make a car? hugo: we are not making a car right now, just to be clear. i think that is an extraordinarily difficult task. it is not something that we can

build today. we are just not resourced to do something like that. but why not? emily: you guys recently raised $1.1 billion. you are now valued at $45 billion. why is xiaomi still private? hugo: i think that is moving -- i think that moving fast and being able to change direction quickly is important. when you are a public company, you are more restrained in your ability to do that, to massively allocate investment into something that may not pan out for some time. i think that being more flexible and being able to move quickly is the reason why we will be private for quite a long time. emily: what does an ipo look like? our ceo is giving speculation that an ipo is five years away. he has been giving the same answer for the last couple of years. emily: how does xiaomi live up to a $45 billion valuation? hugo: we were only an eight markets up until now. there are so many services that people haven't even started thinking about. i think $45 billion is just the beginning.

emily: hugo barra, thank you so much for joining us today. so great to have you. ♪

♪ >> from our studios in new york city, this is "charlie rose." charley: bryant gumbel is here. he is one of television's best broadcasters. he was with nbc for more than two thing decades where he hosted the today show for 15 has todecades where he the today show for 15 years. he joined cbs in 1997 on both his own primetime program and the early show. since 1995, he hosted hbo's real sports with bryant gumbel. the monthly magazine program has won numerous awards including 28