Xiaomi Posts 1st Quarter Loss As Covid, Parts Shortage Hurt Smartphone Sales
Share this @internewscast.com

Xiaomi, the world’s No. 3 smartphone brands after Samsung and Apple, reported a loss of 587 million yuan, or about $88 million, in the first three months of 2022 as fallout from the Covid pandemic and parts shortages hurt business.

The Beijing-headquartered company’s red ink compared with a profit of 7.79 billion yuan a year earlier, Xiaomi said in a statement on Thursday. Sales fell by 4.6% during the period to 73.3 billion yuan.

“The continued supply shortage of key components, resurgence of COVID-19, and global macroeconomic headwinds affected the demand and supply of the overall smartphone market,” Xiaomi noted.

Lockdowns in major Chinese cities including Shanghai and Beijing have wreaked havoc on global supply chains and the country’s economic growth. China is home to the world’s largest auto market, and the impact of lockdown in that industry has been “gigantic,” according to Automobility CEO Bill Russo (see interview here).

Earnings woes have contributed to a 59.4% drop in Xiaomi shares at the Hong Kong Stock Exchange in the past year; they’ve lost about two-thirds of their value since the end of 2020. Xiaomi closed at HK$11.08 on Thursday, above a two-year-low of HK$10.36 on May 12. CEO Lei Jun is still worth $9.4 billion on the Forbes Real-Time Billionaires Index.

Xiaomi, which has more than 10,000 retail locations in China in addition to its online sales, noted the impact of Covid on its offline business in the country. “Recently, the resurgence of Covid-19 in mainland China has softened overall consumption demand and affected the operating schedules and foot traffic of many of our offline retail stores,” it said. “We are actively responding to these challenges and prudently managing our operations to minimize the impact.”

On the brighter side, the company said it sold 19.5 billion yuan of non-phone Internet of Things and lifestyle products in the first quarter, including TVs. Its internet services revenue – which includes advertising and gaming – rose by 8.2% to 7.1 billion yuan in the first quarter “despite the challenges brought by volatility in our smartphone shipments and changes in the regulatory environment in the advertising and gaming industries in mainland China.” International sales accounted for 51.1% of its revenue, up from 48.7% in the fourth quarter.

Xiaomi also said it was continuing to work toward entry into the electric vehicle market. The company said previously it expected a model by 2024, backed by 1,000 research and development staff working on the project to compete in a crowded market with Tesla, NIO and others. China, the world’s largest smartphone market, also leads in global EV sales.

Xiaomi, founded in 2010, has investments in more than 400 businesses, including Nasdaq-listed iQiyi and Kingsoft Cloud Holdings. It ranked No. 291 on the 2022 Forbes Global 2000 list unveiled earlier this month.

See related posts:

China Lands Record Number Of Members On 2022 Forbes Global 2000 List

Tencent Profit Plunges By 51% In First Quarter, Revenue Flat

More Than One In Six Mainland Chinese Billionaires On 2022 Forbes Billionaires List Now Below The Cut

Tips: [email protected]


Share this @internewscast.com
You May Also Like

SpaceX Wins Permission to Connect Planes, Boats and Other Vehicles to Starlink Internet Service

Federal authorities gave SpaceX permission to link a range of vehicles to…

FTX on the verge of purchasing BlockFi in $25M fire sale: Report

Cryptocurrency exchange FTX is close to purchasing digital asset lender BlockFi’s remaining…

GUINNESS GLOBAL EQUITY INCOME: £2bn fund for tricky times

GUINNESS GLOBAL EQUITY INCOME FUND: The £2bn fund that’s designed for tricky…

What Online Retailers Got Wrong about Algorithms and AI

What Online Retailers Got Wrong about Algorithms and AI getty Around the…

Tech trees to fund ambitious science and tech

Have you ever played the game series Civilization, created by designer Sid…

Even If Turkey Gets Modernized F-16s, Greece Will Still Have A Technological Edge In Airpower

The 2022 NATO Madrid Summit ended on Thursday, June 30. Remarks made…

Elon Musk Returns to Twitter, Posting Photo With Pope

The billionaire chief executive of Tesla is normally a prolific user of…

The iPhone’s Creators Reveal the Consequences They Never Expected

While on vacation in Hawaii with his family in 2011, Tony Fadell…