Chinese vendor Xiaomi’s bottom-line was hit by widespread Covid-19 (coronavirus) restrictions in Q2 which slowed demand for smartphones across the country.
President Wang Xiang said on an earnings call China witnessed a resurgence in the pandemic, causing significant disruptions to its offline business.
He pointed to other challenges, including rising global inflation, foreign exchange fluctuations and a complex political environment. “In the face of mounting pressure in both domestic and overseas markets, we remain focused on stabilising our core business and leverage our global scale to mitigate risk in any single market.”
Smartphone revenue dropped from CNY59.1 million ($8.6 million) in Q2 2021 to CNY42.3 million. Shipments dropped from 52.9 million units to 39.1 million.
Wang claimed Xiaomi’s smartphone market share was in the top three in 55 markets.
Net profit dropped 83.5 per cent to CNY1.4 billion, with overall revenue declining 20.1 per cent to CNY70.2 billion
IoT and Lifestyle sales fell 4.3 per cent to CNY20.7 billion and internet services was flat at CNY7 billion.
The number of connected devices on its artificial intelligence of things (AIoT) platform grew 40 per cent to 527 million.
Overseas sales accounted for 48.4 per cent of Xiaomi’s total compared with 49.7 per cent.
R&D spending for 2022 is expected to increase 28.8 per cent to CNY17 billion.