(CapitalWatch, May 19, Hong Kong) The world's third largest smartphone maker saw declining revenue and sales in the first quarter of 2022.
Xiaomi Corp. (OTC: XIACY; HKEX: 1810) reported $10.9 billion in sales in the first three months of 2022, down 4.6% from the same period last year. The results still beat expectations of $10.7 billion
The company cited "continued supply shortage of key components, the resurgence of COVID-19, and global macroeconomic headwinds," as key obstacles during the quarter.
Smartphone makers are battered by current conditions in China. Sweeping lockdowns from Covid outbreaks caused factory shutdowns or severe limits to usual operation. Additional disruptions are also coming from impacts of the war in Ukraine.
Semiconductor Manufacturing International (HKEX: 0981) CEO Zhao Haijun said these two trends could wipe 200 million units from global smartphone shipments in 2022.
Xiaomi reported an 18.2% year on year decrease in shipments for mainland China. Despite the decrease, Xiaomi still held on to 32.3% of the market share in mainland China, according to third-party data.
Although the company suffered from smartphone manufacturing pressure, Xiaomi reported solid growth in other aspects of its business. Xiaomi reported its internet services user base increased and revenue totaled around $1 million, an 8.2% increase year on year. Additionally, its consumer products such as tablets and smart home appliances remain highly ranked in China.
The company is also developing business operations in overseas markets, and it accounted for 51% of first quarter revenue.
Smartphone manufacturers are being hit hard by domestic and global conditions, but Xiaomi seems to be prioritizing diversification to offset it. Smartphones make up more than half of Xiaomi's business, but the company is reporting growth elsewhere.