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Xiaomi grows fast, warns chip shortages will impact product releases

Takes number one smartphone sales slot across swathes of Europe

Xiaomi has warned semiconductor shortages will shape its product release plans for 2021.

Speaking to investors on the Chinese consumer tech star's full-year 2020 financial earnings call, Alain Lam – CFO, vice president and deputy chairman – said Xiaomi thinks this under-supply of chips is cyclical and will remain so.

“I think … this is very normal in the semiconductor industry, every couple of years, maybe three, four years, the industry will have the similar challenges,” he said, “But this time, it’s very, very serious.”

Lam said Xiaomi will therefore “work with our suppliers very, very closely to optimize the supply,” and also “carefully manage our product launch schedule … to mesh with the supply to continually improving efficiency, carefully use the capacity or resources we have.”

He said Xiaomi still expects “very, very strong growth in 2021. We are working with the major suppliers very, very carefully. So we … stay confident for the year 2021 for the business growth not only smartphones, but also in IoT products in China and also out of China.”

A hand holding a Xiaomi phone

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But supply chain issues have already hurt: smart TV sales dipped six per cent or 800,000 units to 12 million units in 2020, thanks to the component crunch.

The problem with tellies didn’t dent an otherwise strong year. The company’s FY2020 results [PDF] reported $37.4bn of revenue, an improvement of 19.4 per cent year over year. Adjusted net profit landed at a tick under $2bn, up 12.8 per cent.

For the first time, more than half of revenue came from outside China. The company did especially well in Europe, where its smartphones topped sales charts in Spain and in the entire central and eastern European region. Overall, it sold 146m smartphones; 10m of those were premium handsets, a category Xiaomi defines as selling for $450 or more.

Xiaomi was also pleased that its new smart speakers and Wi-Fi routers sold 10 million and 15 million units across the year, respectively, and in the process became the second-biggest sellers in their categories within China.

The company’s AI Assistant racked up 86.7 million monthly average users, an increase of 43.5 per cent year-over-year. The Mi Home smart home app was used by an average of 45 million people per month.

There’s more to come, because the super-biz has only just reorganized to create an “internet business department” to get it into online stuff such as content distribution, while a new “data services platform” will crunch big data to improve internal operations.

The company has also teased remote wireless device charging and a smartphone almost completely covered in screens. Just when that sort of kit will come to market – and if component supply issues will create delays – has not been revealed. ®

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