Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Xiaomi books 1H sales fall, putting full-year goal in doubt

Published 07/02/2015, 07:34 AM
Updated 07/02/2015, 07:34 AM
© Reuters. People stand near a logo of Xiaomi ahead of the launching ceremony of Xiaomi Phone 4, in Beijing

© Reuters. People stand near a logo of Xiaomi ahead of the launching ceremony of Xiaomi Phone 4, in Beijing

By Gerry Shih

BEIJING (Reuters) - China's top smartphone maker Xiaomi Inc on Thursday reported semi-annual sales that for the first time were lower than the previous six months, jeopardising its full-year target and hinting at a slowdown in its mainstay domestic market.

The firm said it sold 34.7 million handsets in January-June versus 35.0 million in July-December - the first sequential fall since the company began disclosing six-month figures in 2013. For 2015, it aims for minimum sales of 80 million smartphones.

Xiaomi has enjoyed a rapid rise with handsets it touts as cheaper but well-designed alternatives to Apple Inc's (O:AAPL) iPhones. That led private investors last year to value the firm at $45 billion, making it China's most valuable startup.

Its latest sales result could be a blip as the firm usually ships more handsets in the second half when it markets more new models, but it has made analysts question whether Xiaomi's expansion abroad is fast enough to counter a slowdown at home.

Smartphone shipments in China - where Xiaomi is No. 1 - fell in the first quarter for the first time in six years, though it was unclear whether the drop signalled the start of a downward trend, researcher IDC said in May.

"Around 90 percent of Xiaomi's shipments are in China, so if in that market it doesn't have high growth, it's going to be very difficult," said Canalys analyst Nicole Peng.

Sales would need to pick up dramatically in the second half of the year to meet Xiaomi's 2015 target sales of between 80 million and 100 million handsets - a target revised from a flat 100 million set last year.

"Even with the China smartphone market slowing down, we did a stellar job of posting a 33 percent growth on last year's numbers," Chief Executive Lei Jun said in a statement on Thursday.

Beijing-based Xiaomi has been expanding overseas to relieve the pressure at home, focusing on India, Southeast Asia and, from next week, Brazil.

But in many emerging markets, Xiaomi has to contend with miscellaneous protectionist measures such as a drive in India to promote local production and high import duties in Brazil, said Canalys' Peng.

© Reuters. People stand near a logo of Xiaomi ahead of the launching ceremony of Xiaomi Phone 4, in Beijing

That adds to the threat at home and abroad of competition from more established rivals such as Lenovo Group Ltd (HK:0992) and Huawei Technologies Co Ltd , who are showing they can match Xiaomi on features and price, analysts said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.