Xiaomi posts another blockbuster quarter

Posting a blockbuster quarter and beating analyst estimates is becoming almost a banal event for rising Chinese tech star Xiaomi.

Buoyed by a continued surge in smartphone sales – it now occupies the number two spot behind Samsung in Canalys' ranking of smartphone OEMs – Xiaomi Q2 figures are once again studded with vaulting leaps in turnover and net income. It was the same story the previous quarter and the quarter before that.

For Q2, ended June 30, Xiaomi rattled off a 64% year-on-year increase in revenue to just shy of 87.9 billion Chinese yuan ($13.6 billion). Operating profit was up a bumper 98.8%, to RMB10.7 billion ($1.7 billion), over the same period.

Smartphone boost

Xiaomi's rise up the smartphone OEM rankings is helped by Huawei’s retreat, of course, enforced by US-led sanctions. Even so, Xiaomi has proven expertly adept at taking full advantage.

Smartphone Q2 revenue was up 86.8%, year-on-year, to RMB59.1 billion ($9.1 billion). Global smartphone shipments reached 52.9 million units, giving it a 16.7% market share, which was enough to overtake Apple in the Canalys ranking. Xiaomi shipped 28.3 million units in Q2 2020.

Strong smartphone sales outside China gave Xiaomi's international business a boost too. Q2 revenue from overseas markets reached an all-time high, at RMB43.6 billion ($6.7 billion), which was an 81.6% year-on-year increase. Any idea that Xiaomi might be over-reliant on its home market for growth seems well and truly dead. Sales abroad now account for 49% of the Chinese supplier's turnover.

Leaning again on Canalys figures, Xiaomi boasted that it ranked number one in Europe for the first time with a market share of 28.5%, helped mainly by a strong showing in Central and Eastern Europe (although it was ranked top dog in Spain for the sixth consecutive quarter, and reached number one in France and Italy for the first time in Q2).

In India, a lucrative market for the Chinese supplier, Xiaomi ranked number one in smartphone sales for the fifteenth consecutive quarter.

IoT and Internet services…

Although Xiaomi is probably best known for smartphones, it has successful product lines in IoT devices, Internet services and even smart TVs.

Its IoT and its "lifestyle products" segment, which includes smart TVs, increased revenue by 35.9%, year-on-year, to RMB20.7 billion ($3.2 billion). Q2 sales from Internet sales, at RMB7 billion ($1.1 billion), were up 19.1% year-on-year.

…and self-driving cars

After its Q2 presentation, Xiaomi announced its intention to buy DeepMotion, an autonomous driving tech startup, for around $77.4 million.

The move comes only a few months after Xiaomi said it will invest RMB10 billion ($1.5 billion) in a wholly-owned EV (electric vehicle) subsidiary. Over the next ten years, the company pledged to plow a total of $10 billion into the business.

Lei Jun, Xiaomi CEO – and CEO of the newly-formed EV division – said at the time it was one of the most important decisions ever made by the company, and that he was willing to "put all my personal reputation on the line" to make the "Xiaomi electric vehicle" a success.