Xiaomi’s smartphone revenue fell 11% in Q1 as shipments plummeted

Xiaomi’s recent quarterly report missed expectations, with revenue falling for the first time since 2018.

According to the report, in the first quarter of 2022, Xiaomi’s total revenue reached 73.4 billion yuan ($10.97 billion), down 4.6% from last year, while its adjusted net profit was 2.9 billion yuan, down 52.9% from last year.

The decline in revenue is directly related to the decline in Xiaomi’s smartphone business, which decreased 11.1% to 45.8 billion yuan from 51.5 billion yuan in the same quarter last year. Xiaomi shipped 38.5 million units in the global smartphone market in the quarter, compared with 49.4 million units in the same period last year, down 22.1% year-on-year.

Xiaomi has been affected by the continued shortage of core component supply, the recurring waves of COVID-19, and the global macroeconomic environment in the first quarter, according to Xiaomi President Wang Xiang.  “The shortage of 4G chips has negatively impacted Xiaomi. The company’s phone models with a retail price lower than $150 have seen a shortfall of more than 10 million units,” says Wang.

However, Xiaomi remains optimistic about future growth. Wang believes the severe shortage of chips will gradually improve in the second quarter, depending on the development of the epidemic and changes in the international situation.

The impact of COVID and supply chain disruptions is not unique to Xiaomi. In Q1 2022, global smartphone shipments were 310 million units, down 11% year-on-year, per Canalys. Global smartphone market revenue reached $110 billion in the first quarter, declining 2% year-on-year from the same period of 2021, according to Counterpoint Research. Yet Xiaomi and other Chinese phone makers seem to have taken a heavier blow than others. According to data released by China Academy of Information and Communications, overall smartphone shipments in the domestic market totaled 69.346 million units from January to March, down 29.2% year-on-year.

Xiaomi is also promoting cooperation with overseas telecom operators to expand sales channels. Its overseas market revenue reached 37.5 billion yuan in Q1, accounting for 51.1% of total revenue. The phone maker ranked in the top three in 49 countries and regions worldwide, and top five in 68 countries and regions, in terms of smartphone shipments, according to Canalys.

The company also has positive news on other fronts. Global shipments of Xiaomi smart TVs reached 3 million units, up 15% year-on-year. Xiaomi TV shipments remain the first in China and the top five worldwide, for 13 consecutive quarters, according to Aowei Cloud. In addition, the company’s revenue from internet services was 7.112 billion yuan, compared with 6.57 billion yuan from internet services in the same period of the previous year.

Cover image by Alejandro Morgado on Unsplash