Q1 Sales Down 18.9%
Smartphone Sales Plummet 23.6%
Chinese company Xiaomi's first-quarter performance showed a sluggish trend due to a decline in sales of its core product, mobile phones. Xiaomi plans to diversify its business structure by starting full-scale electric vehicle production as early as the first half of next year.
On the evening of the 24th, Xiaomi announced its financial report for the first quarter of this year, revealing that revenue during this period was 59.477 billion yuan (approximately 11.1055 trillion KRW), down 18.9% year-on-year. Net profit was 3.233 billion yuan, up 13.1% during the same period.
Lei Jun, Xiaomi's CEO, explained, "The global contraction of the mobile phone market and poor sales in the Indian market caused the decline in first-quarter revenue." Regarding the increase in net profit, he said, "Profit margins improved due to product structure optimization, and cost reduction and efficiency enhancement effects have also begun to appear," adding, "Business diversification has allowed us to mitigate risks from a single market."
Xiaomi, the world's third-largest smartphone manufacturer, is estimated to have a market share of about 11% based on shipment volume in the first quarter. According to market research firm Canalys, Xiaomi ranked third in the first quarter behind Samsung (22%) and Apple (21%).
Xiaomi's first-quarter smartphone business revenue was 34.985 billion yuan, down 23.6% year-on-year, and shipments were 30.4 million units, down 21.1%. The average selling price (ASP) of mobile phones was 1,151.6 yuan, a 3.1% decrease. This contrasts with the overall ASP in China, which rose more than 18% year-on-year during the same period. Xiaomi explained that this was mainly due to increased inventory clearance in overseas markets.
Besides smartphones, sales of Internet of Things (IoT) and consumer products amounted to 16.834 billion yuan, down 13.6% year-on-year. The company added that the main reason was a decline in sales of smart TVs, laptops, and some consumer goods in overseas markets. In the fourth quarter, Xiaomi's smart TV and laptop computer sales were 4.7 billion yuan, down 24.2% year-on-year.
Xiaomi plans to enter the electric vehicle market by mass-producing the Xiaomi car as early as the first half of next year. The pure electric vehicle under development is a 4-door coupe model equipped with Hesai's LiDAR sensors, Qualcomm's next-generation smart seat chip, and NVIDIA's OrinX chip. The premium model will feature an 800V high-voltage platform and CATL batteries, while the standard model will have a 400V platform and BYD batteries.
Lei Jun stated, "We completed testing of mass-production vehicles last winter and will conduct tests again this summer and winter," adding, "The progress aligns with our initial goals." Xiaomi disclosed that it invested about 1.1 billion yuan in innovative businesses such as smart electric vehicles in the first quarter.
Additionally, Xiaomi plans to continue investing in related fields centered on an artificial intelligence (AI) laboratory composed of more than 1,200 research and development (R&D) personnel. Xiaomi's first-quarter R&D expenditure reached 4.1 billion yuan, up 17.7% year-on-year. The total R&D investment for this year is expected to exceed 20 billion yuan.
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