Xiaomi recorded increased profit in the Q3, with strong gains in its IoT business offsetting a decline in smartphone revenue caused by a weak China market.
In a statement, chairman and CEO Lei Jun said: “In anticipation of the upcoming era of 5G technology in 2020, the group will continue to stay alert to market trends and operate prudently. With the company’s healthy and stable cash flow and profitability, we are ready to capture and respond to the huge market opportunities that will arise from the widespread adoption of 5G technology.”
Net profit increased 1.6 per cent year-on-year to CNY2.5 billion ($355.7 million), with total revenue rising 5.5 per cent to a record CNY53.7 billion.
Due to a downturn in China’s handset market, smartphone revenue fell 7.8 per cent to CNY32.3 billion, however ASP in the country was up 4.6 per cent. Overseas ASP fared less well, declining 4.1 per cent, though the vendor noted sequential improvement.
Xiaomi said steps to optimise its product portfolio and expand into the mid-tier and high-end markets improved product profitability, with the gross margin of the smartphones segment reaching 9 per cent compared with 6.1 per cent in Q3 2018.
Smartphone shipments hit 32.1 million, with Canalys ranking the vendor in fourth place globally.
IoT and lifestyle products revenue rose 44.4 per cent to CNY15.6 billion, accounting for 29.1 per cent of total revenue in the quarter, up from in 21.3 per cent in Q3 2018.
The number of connected devices (excluding smartphones and laptops) running on its IoT platform increased 62 per cent to 213 million units. Users with five or more devices connected to the platform jumped 78.7 per cent to 3.5 million, while its AI assistant had 57.9 million monthly active users (MAU) in September.
Revenue from the internet services business grew 12.3 per cent to CNY5.3 billion, with MAUs of its Android-based MIUI OS increasing 30 per cent to 292 million.Subscribe to our daily newsletter Back