Xiaomi, [1] the world’s fourth largest smartphone vendor, on Wednesday reported a 3.3% revenue growth (QoQ) in the quarter that ended in September. While the results fell largely in line with analysts’ expectations, a drastic drop in the company’s growth underscores some of the struggles that handset makers are facing as they shift to services to make up for dwindling smartphone purchases globally.
The Chinese electronics firm posted Q3 revenue of 53.7 billion yuan, or $7.65 billion, an increase compared to 51.95 billion yuan ($7.39 billion) revenue it reported in Q2 and up 5.5% from the same period last year.
This is largely in line with analysts’ estimated revenue of 53.74 billion yuan, per Refinitiv figures[2], but growth is slowing. As a point of comparison, in Q2, Xiaomi reported QoQ growth of 18.7% and YoY of 14.8%.
Xiaomi said its adjusted profit in the aforementioned quarter was 3.5 billion yuan ($500 million), up from about 2.5 billion yuan a year ago. Gross profit during the period was 8.2 billion yuan ($1.17 billion), up 25.2% year-over-year.
The company said its smartphone business revenue during Q3 stood at 32.3 billion yuan ($4.6 billion), down 7.8% year-over-year. The company, which shipped 32.1 million smartphone units during the period, blamed “downturn” in China’s smartphone market for the decline.
Marketing research firm Canalys reported this month that China’s smartphone market shrank by 3% during Q3. Despite the slowdown, Xiaomi said its gross profit margin of smartphones segment had reached 9% — up from 8.1% and 3.3% in the previous quarters.
Other than Huawei, which leads the handsets market in China, every other smartphone vendor has suffered a drop in their shipment volumes[3] in the country, according to research firm Counterpoint....