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Xiaomi revenues up by a third due to strong phone sales and triple-digit European growth
Cheap and cheerful clearly appealed during pandemic
It has been a difficult year for the mobile industry as economic uncertainty and widespread national lockdowns further depressed the public's appetite for handset upgrades. Some vendors are faring better than others, however, with Xiaomi proving especially resilient.
The Chinese gadget maker reported calendar Q3 revenues of ¥72.2bn (£8.23bn), up 34.5 per cent compared to the same period last year. These were bolstered by brisk trade in the IoT and mobile divisions.
Handset shipments reached 46.6 million units, a year-on-year growth of 45.3 per cent. Smartphone revenue was ¥47.6bn (£5.43bn), an increase of 47.5 per cent against Q3 2019.
Xiaomi is best known for its cheap-and-cheerful handsets, and these represented the bulk of the firm's volumes. According to Alain Lam, the recently appointed chief financial officer, Xiaomi has shipped merely 10 million "premium" devices in the year to date, which it defines as any phone with a retail price over €300 in the overseas market, or ¥3,000 (roughly £340) in mainland China.
The figures correlate closely with forecasts for the period produced by industry analysts. Canalys, for example, was almost bang on the money with a forecast of 47.1 million shipments. This, it said at the time, put Xiaomi in third spot in the smartphone sales leader board for the first time, overtaking local rival Huawei in the process.
Still, they are impressive numbers when you take into account the smartphone market overall declined by 1 per cent in the third quarter, and the geographical split. For the first time ever, overseas markets accounted for half of all Xiaomi revenue. While much of this portion pertained to India, where Xiaomi has strong foothold, a major driver of expansion was Western Europe, where shipments grew 107.3 per cent year-on-year for a region-wide market share of 13.3 per cent.
Spain was among the first European markets targeted by Xiaomi, where it holds the top spot with a 33.9 per cent market share. But the company also saw triple-digit growth in France, Germany, and Italy.
According to Lam, Xiaomi plans to invest more in Europe by continuing to build its carrier channel. This is move away from Xiaomi's historical strategy, which focused on online-only sales to customers.
Evidence suggests this switch in routes-to-market is beginning to bear fruit, with network shipments up 200 per cent year-on-year during the first nine months of 2020, allowing Xiaomi to swallow a carrier market share of 4.6 per cent.
In terms of the other areas of tech at Xiaomi, the IoT and lifestyle products division grew to 16.1 per cent to ¥1.8bn (£205m) and Internet Services – games, web advertising, etc. – was up 8.7 per cent to ¥5.8bn (£660m).
The company made a net profit ¥4.1bn (£467m). ®