Xiaomi’s results for the third quarter of 2020 are in the green! The Chinese company is taking advantage of its competitor Huawei’s difficulties to sell more smartphones outside of China. The only downside is the weak growth in internet services which resulted in a 4.2% drop in Xiaomi’s share on November 25.
Xiaomi to conquer the world
Xiaomi’s total revenue rose 34.5% to 72.2 billion yuan (€ 9.2 billion) in the third quarter of 2020. This is the fastest growth rate in two years. A good performance driven by the international market. Europe and India account for half of the company’s sales for the first time. In May, Xiaomi did not hesitate to launch Mi Commerce despite the lockdown in India. A strategy that seems to be paying off.
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Xiaomi’s spearhead remains the smartphone. Xiaomi device unit shipments grew 42% worldwide in the third quarter. In China, Xiaomi is also benefiting from the introduction of 5G to increase sales of its compatible devices.
The company benefits internationally from the difficulties of its competitor Huawei on the international market. Huawei has been targeted directly by the US and has tarnished its image around the world. In the smartphone market, Huawei cell phone sales fell 22% in the third quarter.
Despite these results, Xiaomi’s quarterly balance sheet has some flaws. Company President Wang Xiang expressed concern about the lack of components for his devices caused by global production slowdowns due to the Covid-19 pandemic. “While we are still confident about the fourth quarter, we and other suppliers will continue to have problems with delivery bottlenecks,” he explains.
The disappointing results of internet services lead to an encouraging result
What particularly alarmed investors is the slow growth of Xiaomi’s internet services. Online music and video services grew 8.7% from 29% in the previous quarter. A result related to the slowdown in the boom in online activity as a result of the pandemic in China. It was this growth, the lowest in the industry in three years, that caused Xiaomi’s stock value to fall 4.2%. A decline that needs to be put into perspective, as the results of the BATX X are promising beyond the borders of the Middle Kingdom. Especially since Xiaomi is planning large investments in the future.