Xiaomi profit doubles in second quarter amid strong premium smartphone sales as market slump nears bottom
- Xiaomi has been working through a glut of smartphone supply and cutting spending, and has emphasised its intention to expand in Latin America and Europe
- Co-founder Lei Jun has also focused on electric vehicles, which Bloomberg Intelligence estimates could account for 5 per cent of Xiaomi’s 2024 revenue
Net income more than doubled to 3.67 billion yuan (US$503 million) in the three months ended June, versus the average estimate of 3.16 billion yuan. Revenue slid a less-than-projected 4 per cent to 67.4 billion yuan, narrowing declines from previous quarters when the smartphone market slump was at its worst.
Beijing-based Xiaomi has been steadily working through a glut of smartphone supply, while spending cuts helped stabilise the bottom line during China’s faltering economic recovery. The domestic mobile market – the world’s largest – is now showing signs of bottoming out. Xiaomi also sold more premium smartphones, cushioning margins: its average selling price in China climbed more than 24 per cent.
Executives acknowledged uncertainties facing the global economy but asked for patience, reaffirming Xiaomi’s intention to expand in regions such as Latin America and Europe and into new arenas such as services and electric vehicles. It’s also awaiting a bottom in India, where it’s grappling with a regulatory probe into alleged forex violations.
“As a consumer electronics player, Xiaomi has to scale up in global markets,” President Lu Weibing told reporters after the results were released. “Xiaomi will firmly proceed the legal actions in India. We’ve actually seen a pretty big improvement in Indian business, I believe you will see some indexes showing the change soon.”