Xiaomi sees little impact from shrinking smartphone sales
Company to launch new product at next year’s Consumer Electronics Show in Las Vegas
Sharp drops in smartphone sales for Xiaomi will not have a major impact on the company as profit growth will be driven by sales from smart home devices as well as revenue from its software ecosystem, a senior executive said.
Xiaomi was valued atUS$46 billion in its last fund-raising in 2014 – making it briefly the world’s most valuable start-up at a time when it was China’s best-selling smartphone maker and looked set to make a splash worldwide.
But last year it missed its global smartphone targets by 12 per cent, while its third-quarter China smartphone sales have tumbled 45 per cent, according to research firm International Data Corporation – raising doubts that the valuation is still warranted.
Xiaomi’s global vice-president Hugo Barra said the company’s business model was not based on money made from handset sales per se and that it did not need to raise more funds or see any point in doing so at a valuation of less than US$46 billion.
“Basically we’re giving to you without making any money. We care about the recurring revenue streams over many years,” he said. “We could sell 10 billion smartphones and we wouldn’t make a single dime in profits.”