China Xiaomi’s profit in the second quarter (April-June) was 1.39 billion yuan (about 27.9 billion yen), a decrease of 83.5% compared to the same period last year. US media Bloomberg reported that it was significantly lower than the initial forecast of 1.5 billion yuan.
Struggling to compete with competitors
According to Xiaomi’s announcement, sales were 70.17 billion yuan (about 1.409 trillion yen), down 20.1% year-on-year, which seems to have been almost as expected.
Xiaomi, once the largest smartphone brand in China, is losing young users seeking innovative designs and the latest technology to other Chinese brands such as Honor and vivo.
Apple’s iPhone is strong in the premium market, which the company has been focusing on in recent years, and it is struggling to expand its share.
Xiaomi faces tough times in China and India
Under such circumstances, Bloomberg analyzes that Xiaomi’s smartphone sales are further declining due to anxiety factors such as inflation, economic recession, and Russia’s invasion of Ukraine.
According to research firm IDC, in the second quarter of 2022, among the world’s top five smartphone vendors, Xiaomi had the largest year-on-year drop in shipments.
China’s economic slowdown is also hurting the smartphone market. Similarly, according to IDC, smartphone shipments in China from April to June 2022 decreased by 14.7% year-on-year, but Xiaomi fell below the market by 22%.
Furthermore, in India, the largest overseas market, the tightening of Chinese smartphone vendors is increasing.
It can be said that Xiaomi is in a difficult situation in the smartphone business.
Source: Xiaomi, Bloomberg
Source: iPhone Mania