Smartphone maker, Xiaomi’s quarterly revenue drags as competition heightens
Slow growth in the Chinese economy, unabated U.S-China trade spat has seen Chinese consumers rally behind under-attacked phone rival, Huawei, who are buying the company’s phones after it was blacklisted by the United States, limiting access to U.S. components and technology.
This shift has however seen the market share of other phone brands plummeting. Chinese phone maker, Xiaomi’s revenue in the second quarter ended June 30 increased to 51.95 billion yuan ($7.36 billion) from 45.24 billion a year earlier, short of the 53.52 billion yuan earlier expected by analysts.
Its net income slumped 87percent to 1.96 billion yuan. Still, adjusted profit of 3.64 billion yuan beat the 2.74 billion expected by analysts.
According to Xiaomi, total smartphone shipments in the second quarter rose to 32 million. According to market research firm Canalys, Huawei’s market share in China surged by 31percent in June quarter, while Xiaomi’s share plunged by a fifth.
Huawei is China’s largest tech company by sales and is going all-out to remain relevant in the phone market. The competition in the global phone market has become very intense in recent times as brands which before now play on the fringes of the market are currently challenging the market leadership of premium brands.
Despite being at the center of global scrutiny from the United States, Huawei posted a 25 percent jump in its 2018 profit.
The electronics giant posted net income of 59.3 billion yuan ($8.8 billion) in 2018 as it won more customers for its smartphones and networking gear, while revenue for the year jumped almost 20 percent to 721 billion yuan. Revenue from its consumer business, which includes smartphones, jumped 45 percent to 348.9 billion yuan while sales in the carrier unit were little changed at 294 billion yuan.
Xiaomi listed last year, gets the majority of its revenue from mobile handsets, but also makes money selling online ads and other consumer devices.