Xiaomi reported a 13.6 percent rise in first-quarter revenue on Wednesday, beating estimates as the Chinese smartphone maker sold more phones and benefited from sales of its higher-priced 5G models. The company managed to increase sales despite the impact of the coronavirus, which shook supply chains and reduced overall demand for smartphones.
"Our production in mainland China has largely resumed, and demand for smartphones has recovered rapidly," the company said in its first-quarter earnings report. Xiaomi's optimism contrasts with its rivals Apple and Samsung Electronics, which have warned of a difficult year ahead.
Sales in the first quarter of 2020 increased to CNY 49.7 billion (approximately Rs. 53 billion rupees) from CNY 43.76 billion (approximately Rs 47 billion) in the same period of the previous year, exceeding analyst expectations for CNY 47.86 billion (approximately Rs. 50 billion rupees). The company attributed the jump to rising prices for its newly launched 5G phones in China, as well as increased overseas sales.
Profits fell approximately a third due to a drop in the value of Xiaomi's investments in other companies. The company makes most of its revenue from the sale of mobile phones, but it also makes money selling online ads and other types of consumer hardware.
Xiaomi has faced intense competition in China in recent years from its largest national rival, Huawei. Furthermore, China's domestic smartphone market has shrunk and to offset this Xiaomi and other smaller Chinese rivals have focused on growth abroad. Xiaomi's shipments to Chinese consumers in the first quarter fell more than a quarter from a year earlier, market research firm Canalys said, compared to an 18 percent drop in smartphone sales in the country. .
In March, the company said it was seeing signs of a recovery in sales in China after weeks of blocking to stop the coronavirus outbreak.
© Thomson Reuters 2020
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