first-quarter sales boost as smartphone demand rebounds
Customers line up at Xiaomi’s flagship store in Mong Kok, Hong Kong.
Miguel Candela | SOPA Images | LightRocket | Getty Images
On Wednesday, Xiaomi announced a 13.6% increase in its revenues in the first quarter, exceeding estimates, the Chinese manufacturer of smartphones having sold more phones and benefiting from the sales of its more expensive 5G models.
The company has managed to increase sales despite the impact of the coronavirus, which has shaken supply chains and dampened overall demand for smartphones.
“Our production in mainland China has largely recovered and demand for smartphones has rebounded quickly,” the company said in its first quarter earnings release.
Xiaomi’s optimism contrasts with rivals Apple and Samsung, both of which have announced a difficult year.
Sales in the first quarter of 2020 reached $ 7 billion, compared to $ 6.2 billion in the same period the previous year, exceeding analyst expectations by $ 6.7 billion.
The company attributed the jump in prices for its recently launched 5G phones in China to growth in overseas sales.
Profits fell by around a third due to a drop in the value of Xiaomi’s investments in other companies.
The company derives most of its revenue from the sale of mobile handsets, but also earns money by selling online advertisements and other types of consumer equipment.
Xiaomi has faced intense competition in China in recent years from its biggest domestic rival, Huawei. In addition, the domestic smartphone market in China has shrunk and to compensate for this, Xiaomi and other smaller Chinese rivals have focused on overseas growth.
Xiaomi’s shipments to Chinese consumers in the first quarter fell more than a quarter from the previous year, market research company Canalys said, compared with an 18% drop in smartphone sales in the country.
In March, the company said it was seeing signs of a resumption of sales in China after weeks of foreclosure to stem the coronavirus outbreak.