By WU Yangyu
Xiaomi’s revenue from all three main business segments –phones, IoT and lifestyle, advertising and games – was down in Q3. The phone business, which contributed 60 percent to total revenue, shrank by 11 percent despite good reviews for the Note 12 Series.
Xiaomi still has 13.6 percent of the global market, the third largest after Apple and Samsung, but shipments were down by 7.8 percent in Q3. In China, where it is the fifth largest phone maker with a 13 percent market share, shipments were down by nearly 20 percent.
Archie Zhang of Counterpoint Research told Jiemian News that the drop in phone sales is in line with the overall decline in consumer spending. Vivo and OPPO, the two biggest brands in China, both saw shipments down by more than 20 percent.
Most smartphone makers have been trying to cut inventories this year. Xiaomi was able to get its inventory down by 9 percent in Q3. But its average selling price dropped from last year’s 1,090 yuan to 1,058 yuan. In the earnings call, President WANG Xiang said going high-end is a long-term objective and will not be achieved with one or two hits.
Xiaomi’s global market share has slipped behind Samsung to third place in recent years. In India, where it has managed to maintain the lead, competition is heating up both from Samsung and domestic rivals such as OPPO. The high inflation and high-interest global economy threaten overseas sales.
Xiaomi’s operating system, MIUI, now has 564 million users, 141 million of them in China. Ads and games brought in 1.7 billion yuan overseas in Q3, up by 17 percent year over year.
R&D expenses increased by 25.7 percent in Q3 to 4.1 billion yuan, 829 million of which was spent on EVs. Wang assured investors that Xiaomi is careful with car-related spending, and that the EV investment will not have a material impact on the rest of the company.
