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| Xiaomi's revenue is declining as competition intensifies |
Due to intense competition from competitors, smartphone sales growth stagnated, and the Chinese company Xiaomi announced that the third-quarter sales growth was below expectations by 8.2%.
The vast majority of the company's revenue comes from mobile phone sales. The company said smartphone sales rose 0.4% to 47.8 billion yuan ($7.49 billion) in the three months ended September 30.
However, year-over-year third-quarter smartphone shipments declined 5.8% to 43.9 million units. The company cited a global shortage of chips as the reason for the decline.
Company president Wang Xiang said that Xiaomi is working hard to bring 4G devices to overseas markets.
He added that he expects the scarcity to continue in the first half of next year, although he still believes the company will maintain very high growth in 2022.
Sales for the July-September quarter totaled 78.06 billion yuan, exceeding market expectations of 79.20 billion yuan.
Xiaomi managed to gain market share in China after its sanctioned rival Huawei ran into trouble, but it recently lost out to Oppo, Vivo and Huawei Honor.
Honor overtook Xiaomi in the July-September quarter, ranking third in smartphone market share in China.
Market research firm Canalys said Xiaomi's shipments to China increased just 4% annually during that period. Total smartphone sales in the country decreased by 5%.
The company responded to the competition by entering aggressively into the traditional retail market. The company last month opened its 10,000th store in China. He also promised to triple this number over the next two or three years.
Xiaomi enters the field of electric cars
The company has announced plans to start mass production of electric vehicles in the first half of 2024. The company had announced last March that it would spend $10 billion to enter the electric vehicle market.
The company also makes money selling ads and other types of consumer devices online.
The annual growth rate of the Internet service industry has reached 27%. Most of the money the department makes by placing ads in different applications.
Excluding one-time gains and losses, Xiaomi made a profit of 5.18 billion yuan. This is basically the same 5.09 billion yuan that analysts are expecting on average.