Xiaomi Q3/2019: Growth Rate Dropped Significantly, Selling Smartphones At Higher Price For More Profit

Karamchand Rameshwar - Nov 29, 2019


Xiaomi Q3/2019: Growth Rate Dropped Significantly, Selling Smartphones At Higher Price For More Profit

The Chinese phone maker Xiaomi is said to release affordable 5G smartphones next year, which might be a good way to boost its sales again.

Xiaomi, the world's fourth-largest smartphone manufacturer, has just announced its business results for Q3 / 2019, lasting from early July to the end of September. Although the growth is still slowing down, the results show that Xiaomi is also facing big problems when it wants to switch from smartphone business to service business.

Xiaomi

Total revenue in Q3 / 2019 reached 53.7 billion CNY (about Rs. 54,905.1 crore), an increase of 3.3% compared to Q3 / 2018. The growth rate is significantly slowing down, the Q2 / 2019 report achieved an annual growth of 14.8%, while it was only 3.3% in the last quarter.

Sadly, however, smartphone sales fell 7.8 percent to 32.3 billion CNY. In Q3 / 2019, Xiaomi shipped 32.1 million smartphones and it blames the market decline for that.

Although smartphone sales have declined, Xiaomi said its gross profit margin on each smartphone sold increased. In Q3 / 2019 it was 9%, in previous quarters it was only 8% and 3%. Show that Xiaomi is increasingly selling smartphones at higher prices, increasing profits, just like Apple's business strategy.

Xiaomi Mi Note 10 Review 4
Xiaomi's latest offering - Mi Note 10

Xiaomi is also changing its business strategy to become more like Apple, which is reducing reliance on hardware business and strengthening the service business. However, Xiaomi's services segment is still too small.

Revenue from services grew by 12.3% compared to last year, but still only reached 5.3 billion CNY (around Rs. 5418.9 crore). It accounts for only a small part of the whole business, while the smartphone segment still accounts for the majority.

It can be seen that Xiaomi really wants to learn from Apple's business strategy, but it has not been successful. Chinese manufacturers are still heavily dependent on the hardware business. And Xiaomi's next strategies are also focused on hardware, such as expanding sales in overseas markets, launching a lot of new 5G smartphones in 2020. 

Separately, the brand is expected to launch the Redmi K30 early next month as a successor to the popular Redmi K20 series.

Comments

Sort by Newest | Popular

Next Story

Read more

No Millionaires At This Bank As It Only Serves Billionaires

Features- Dec 06, 2019

No Millionaires At This Bank As It Only Serves Billionaires

The International Bank Vaults (IBV) is a company providing bank vaults and personal asset protection services only for billionaires.

Xiaomi Introduces Next-Gen QiCycle Electric Bicycle At Rs 31,771

Features- Dec 06, 2019

Xiaomi Introduces Next-Gen QiCycle Electric Bicycle At Rs 31,771

Xiaomi has put on the market several other popular bike models, including electric ones. And this latest bike is the next-generation of the R1.

Believe It Or Not - Monkeys Know When They Don’t Know Something

Features- Dec 06, 2019

Believe It Or Not - Monkeys Know When They Don’t Know Something

Monkeys seem smarter than you might think: they also have a self-cognitive system.

Qualcomm’s Latest In-Display Fingerprint Sensor Can Read Two Fingerprints At Once

Mobile- Dec 05, 2019

Qualcomm’s Latest In-Display Fingerprint Sensor Can Read Two Fingerprints At Once

The new-gen ultrasonic in-display fingerprint sensor from Qualcomm has a 17 times larger scan area compared to the first-gen sensor.

Everyone Is Feeling Confused With The New “AI KeyBoard” From Amazon

Features- Dec 06, 2019

Everyone Is Feeling Confused With The New “AI KeyBoard” From Amazon

Amazon Web Service introduced its new keyboard named DeepComposer, stating that it is the first generative-AI-powered musical keyboard in the world.

Apple Finally Talked About Why Its iPhone 11 Pro Is Tracking Users' Location

ICT News- Dec 06, 2019

Apple Finally Talked About Why Its iPhone 11 Pro Is Tracking Users' Location

After failing to address an earlier report about the iPhone 11 tracking users' location, Apple has finally raised its voice and given an explanation.