Xiaomi's growth is driven by premium smartphones

Despite ongoing worldwide supply shortages, Xiaomi reported double-digit growth in smartphone revenue and ASP in the final quarter of 2021, which it expects to improve by the second half of the year.

President Wang Xiang said on an earnings call that Xiaomi had good performance across all business categories in the fourth quarter and for the whole year, expanding its dominance in the premium smartphone market.

Wang stated that the company is still experiencing supply issues, but anticipated that “the situation will significantly change” beginning in Q2 and “especially in the second half of 2022.” Net profit fell 72.2 percent to CNY2.4 billion ($376.7 million) in Q4 2021, while total revenue increased 21.4 percent to CNY85.6 billion.

Sales outside of China climbed by 23.4 percent to CNY41.6 billion. Smartphone sales increased by 18.4% to CNY42.6 billion, with global shipments increasing by 4.4 percent to 50.5 million units.

The average selling price (ASP) increased by 13.3% to CNY1,144. 60 percent of overall income came from the smartphone category. Xiaomi claimed that its smartphone shipments ranked third in the world, with a 12.5 percent share, according to Canalys data.

According to CFO Alain Lam, the vendor’s global smartphone market share jumped from 9.2 percent to 14.1 percent between 2019 and 2021, with a record high of 15.2 percent in mainland China in 2021, putting it in the third position.

Other units

Sales of smart TVs, Xiaomi Pad 5 series tablets, and wearables led to an increase in IoT and lifestyle turnover of 19.1% to CNY25.1 billion. Due to a surge in advertising, Internet service income grew 17.7% to CNY7.3 billion.

The gain was fueled by an 80 percent increase in international revenue to CNY1.6 billion, as well as a 7.6% increase in mainland China sales to CNY5.7 billion. R&D spending increased by 24.1 percent to CNY3.1 billion in the corresponding period and by 42.3 percent to CNY13.2 billion in the full year. Over the next five years, Xiaomi intends to invest more than CNY100 billion in R&D.