Xiaomi executives expressed optimism global smartphone sales would follow China’s lead in swiftly recovering from the impacts of the Covid-19 (coronavirus) outbreak, as the company posted a steep drop in its 2019 profit.
Company president Wang Xiang, on an earnings call, acknowledged smartphone production and demand in China suffered in early February, as the pandemic forced businesses across the country to close. However, he said both had experienced a “very strong rebound” to between 80 per cent and 90 per cent of normal levels as of 31 March.
Xiaomi reopened most of its retail locations in China earlier this month as production began to come back online.
Wang said Xiaomi expects to feel the impact of Covid-19 outbreaks in other global markets in Q2, but “demand will likely be deferred rather than lost”.
“Based on the experience in China, smartphone demand is resilient and will rebound globally,” he said, adding “we remain confident for the rest of the year”.
He reiterated plans to “aggressively” promote its 5G line of devices throughout 2020, and let its inventory of 4G devices dwindle to zero as part of the strategy.
Net profit in 2019 dropped 25 per cent year-on-year to CNY10.1 billion ($1.4 billion) on revenue of CNY205.8 billion, up 17.7 per cent.
Xiaomi chairman and CEO Lei Jun in a statement said the company overcame “headwinds from the Sino-US trade war and global economic downturn” to cross the CNY200 billion revenue mark for the first time.
Smartphone shipments hit 124.6 million units (up from 118.7 million in 2018), with the business generating revenue of CNY122.1 billion, up 7.3 per cent. Its IoT and lifestyle products unit grew revenue 41.7 per cent to CNY62.1 billion, with Internet services 24.4 per cent higher at CNY19.8 billion.
Trends in Q4 mirrored the full year, with profit down 28.2 per cent to CNY2.4 billion, and revenue climbing 27.1 per cent to CNY56.47 billion.Subscribe to our daily newsletter Back