Xiaomi Corp.
The worldwide smartphone downturn prevented growth at the Chinese mobile giant Xiaomi Corp., causing Xiaomi Corp.’s profit to decline more than anticipated.
In contrast to expectations of 1.5 billion yuan, net income for the three months ending June decreased by 83% to 1.39 billion yuan ($204 million). Compared to an average expectation of around 70 billion yuan, revenue decreased 20% to 70.2 billion yuan.
Xiaomi, once the leading smartphone manufacturer in China, has lost market share to local competitors Honor and Vivo, whose slick aesthetics and aggressive marketing have attracted young, tech-savvy consumers. Xiaomi has made gradual headway in its attempts to enter the premium market, where Apple Inc.’s iPhones continue to hold a dominant position.
The smartphone market for Xiaomi has been impacted by inflation, economic fears, and the conflict in Ukraine. The largest fall among the top five vendors in the world, its global device shipments fell by more than a fourth in the second quarter, according to IDC. According to research firm IDC, Xiaomi device shipments in China fell 22% in the June quarter, falling more quickly than the average market loss of 14.7%.
India is attempting to prevent Chinese smartphone manufacturers from selling products for less than $150, which will hurt companies like Xiaomi.
According to Xiaomi President Wang Xiang, the company’s business in India has not yet been impacted by the rumored regulation change. He added that the business is in constant contact with regional authorities over a number of concerns and that it is still exporting low-end phones to India. According to a note written by Bloomberg Intelligence analysts Tseng and Nathan Naidu ahead of the earnings announcement, market-wide discounts provided during a significant online sales push in the time significantly reduced Xiaomi’s profitability.
In the second half, Wang said, he is “lightly optimistic” about the smartphone industry as new products and the holiday season drive sales. But he also issued a warning that demand could be further dampened by concerns like inflation and Covid outbreaks in China.
Lei Jun, a billionaire co-founder, is on a goal to turn his 12-year-old business into an innovation-driven behemoth that produces everything a family may need, including dishwashers, baggage, and security cameras. The company’s largest project is a $10 billion electric vehicle initiative run by Lei. But as Bloomberg News reported in July, Xiaomi is having problems securing certification from Chinese officials. Lei stated that he is still committed to the automobile project during a corporate function last week.
Featured Image: Megapixl @Nunataki
Author Jowi Kwasu 
