Xiaomi revenue misses estimates as competition intensifies

 

SHANGHAI :Chinese smartphone maker Xiaomi Corp on Tuesday reported a smaller than expected 8.2per cent rise in third-quarter revenue, hurt by intensifying competition from domestic rivals Oppo and Vivo.

Sales rose to 78.06 billion yuan (US$12.22 billion) in the three months to Sept. 30. Analysts had expected 79.20 billion yuan, Refinitiv data shows.

Profit slumped 84per cent to 788.6 million yuan, which Xiaomi attributed to changes in the valuation of companies in its investment portfolio.

Excluding one-time gains and losses, Xiaomi earned 5.18 billion yuan in profit, largely in line with the average analyst expectations for 5.09 billion yuan.

Xiaomi's smartphone revenue rose just 0.4per cent to 47.8 billion yuan.

Overall smartphone sales in China fell 5per cent in the July-September period, according to research firm Canalys.

Xiaomi has managed to gain market share this year due to the retreat of its key rival Huawei Technologies Co Ltd, which saw its smartphone business tank following U.S. sanctions.

But the company has not grown at the same rate as top-selling rivals Oppo and Vivo, while Honor - a spin-off brand from Huawei - surpassed Xiaomi in the third quarter to become China's third largest smartphone maker in terms of market share.

Xiaomi's shipments in China grew just 4per cent year-on-year in the third quarter, Canalys said.

Facing tight competition in a shrinking market, the company has responded by launching an aggressive push into brick-and-mortar retail, a sector it has long lagged in.

In late October, Xiaomi announced it had opened its 10,000th store in China, and committed to tripling that count over the next two to three years.