On Tuesday, China’s Xiaomi (XIACF) Corp reported an 8.2 percent increase in third-quarter revenue. However, according to reports, the company’s performance fell short of expectations, owing to competition from competing smartphone manufacturers.
After rival Huawei Technologies Co Ltd receded from penalties, Xiaomi was able to gain market share in China. However, it has recently faced intense competition from top-selling brands Oppo and Vivo, as well as Huawei spinoff Honor.
The quarterly sales growth of Xiaomi Corp.’s slowed noticeably as the Chinese smartphone maker battled a resurgent Apple Inc., and supply chain chaos hampered the flow of critical components. By 4:57 a.m. GMT, shares had dropped 6.96 percent to $2.47.
According to market research firm Canalys, Honor surpassed Xiaomi to take third place in China’s smartphone market share in the July-September quarter. However, shortages of the chips used in the Beijing-based company’s devices and smart appliances are expected to last well into 2022 before alleviating in the second half of the year.
Xiaomi makes the majority of its money selling smartphones. In the three months ending Sept. 30, it reported a 0.4 percent increase in smartphone revenue to $7.49 billion. Xiaomi has retaliated by focusing on physical retail. The firm established its 10,000th outlet in China last month.
However, in the third quarter, smartphone shipments declined 5.8% year over year to 43.9 million devices. The drop was attributed to a worldwide chip shortage. Despite the supply shortage, which has impacted related industries such as automobiles and computers, Xiaomi aims to ship around 190 million smartphones in 2021, up 29% from last year.
Xiaomi’s shipments in China increased by only 4% year over year over the period, according to Canalys. However, overall smartphone sales in the country declined by 5%. During an earnings call, Xiaomi president Xiang Wang stated that the business is working hard to secure 4G handset supplies in foreign markets.
In the September quarter, revenue increased by only 8% to $12.2 billion, falling short of analysts’ expectations but still well behind the 64 percent growth rate seen in the preceding three months.