Chinese smartphone vendor Xiaomi reported a 55% growth in first-quarter 2021 revenue of 55%. The growth was above analyst expectations, as it successfully grabbed market share from previous market leader Huawei.
Revenue rose to 76.88 billion yuan ($ 12 billion) in the quarter ended March 31, from 49.70 billion yuan a year earlier. Analysts expect revenue of 74.5 billion yen, according to Refinitiv data. This achievement shows that Xiaomi is one of the vendors that benefited the most because the sanctions imposed by the US government made Huawei lose significant market share.
Adjusted net profit rose to 6.1 billion yuan, compared to a market estimate of 3.97 billion yuan. Xiaomi’s smartphone market share in China increased 75% year-on-year in the quarter ending late March, according to research firm Canalys, as Huawei pulled out of the market following US trade restrictions that limited its ability to procure key components for its handsets.
Revenue from smartphone sales surged 69.8% year-over-year to 51.5 billion yuan, while revenue from internet services increased 11.4% year-over-year to 6.6 billion yuan.
Despite revenue growth, Xiaomi and other electronics brands remain hampered by a global chip shortage. A number of causes such as stockpiling, surging demand for personal computers during COVID-19, and a factory accident caused a number of hardware makers to scramble for semiconductors late last year.
Speaking by phone with investors, Xiaomi CFO Alain Lam said that the company’s chip inventory remains at “healthy” levels and does not expect a major impact on the company’s business this year, although the broader shortage may not end until mid-2022.
In the 2021 quarter, Xiaomi has announced that it will officially start producing electric cars, with a new division led by Xiaomi founder Lei Jun.
On the other hand, the US government also removed the company from the blacklist which would prohibit US-based investors from owning shares in the company. The decision reversed one of former US president Donald Trump’s last maneuvers against China’s technology sector before leaving the White House.
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