Xiaomi, the Chinese company best known for economic phones, is betting big on the future of connected homes. It plans to invest at least 100 billion yuan, or $ 1.48 billion, in the sector called "AIoT" over the next five years, announced Friday the founder and chief operating officer, Lei Jun.

AIoT, abbreviation for "AI + IoT," is an upgrade of devices connected to the Internet, known as the Internet of Things. AIoTs are smart, operate on automated systems and can learn from user habits, such as lights that turn on automatically when you go home.

"We envision a future where all home devices will be connected to the Internet and controlled by voice. A wave of home appliances will be replaced by smart appliances. There will be an AIoT network that infiltrates every second and every scenario in people's lives, collecting mountains of users, traffic and data, "said Lei in his annual employee speech.

The goal is to integrate all kinds of gadgets, not just handsets, into Xiaomi's operating system, so that the company can access services through these devices. This decision comes as Xiaomi, the world's fourth-largest smartphone provider, faces a declining market. Smartphone shipments to China fell by more than 15 percent in 2018, according to a government-backed research institute.

Phones remain strategically important to Xiaomi, as low-end phones are looking for growth. On Thursday, the company announced it had split its low-budget phone brand, Redmi, in hopes of launching "red rice" – what Redmi means in Chinese – to become the star of Xiaomi's "little rice". . The strategy is similar to how Huawei operates the sub-brand Honor for its range of cheaper phones.

Xiaomi's new billion dollar promise is in line with the plan put in place in 2013 to support 100 startups over five years. These portfolio companies have in turn contributed to the manufacture of Xiaomi products, which now have 132 million devices in total (of which 20 million are active daily). Xiaomi's voice assistant, Xiao Ai, has already passed the milestone of 100 million installations.

These gadgets, as well as an assortment of lifestyle products, such as suitcases and umbrellas, became Xiaomi's main revenue driver in the second quarter of last year, according to the company's earnings report.

Xiaomi is struggling with other Chinese tech giants such as Baidu to break into people's homes. It looks like a department store, but it can not do everything yourself. Recently, the giant has multiplied TV sales through a partnership with a Chinese manufacturer of veteran home appliances. He has also partnered with IKEA to create a 100 million yuan ($ 14.8 million) fund for third-party developers, which will add to Xiaomi's inventory, as Chinese consumers will soon be able to purchase many equipped furniture. from the Xiaomi system to the Swedish retailer.