Xiaomi Losing Grip in The Smartphone Market Despite Revenue Rise

Xiaomi, a Chinese smartphone manufacturing company is facing uncertainty as its growth is facing a stall despite having an increase in revenue.

Xiaomi now has a low market share as compared to the previous years with the company reporting slower growth and low shipment in the first quarter of 2019.

The company released a report that showed the revenues increased by 25 percent and 15 percent in Q1 and Q2 respectively.

However, the company attributes the increased revenue to other devices that it sells other than smartphones.

Profits of Xiaomi fell below expectations something that left shareholders of the company worried especially in Q2. Analysts had projected an increase in the profit margin for the second quarter of 2019.

The reports indicated that Xiaomi, just like most smartphone companies, is facing a shipment challenge due to the fact that consumers stick to their old phones and waiting for upgrades, leaving very few making new purchases.

Xiaomi’s concentration on manufacturing other products has contributed a lot to the company, constituting 44 percent of the total number of receipts in Q2. This is a quarter of the total revenues.

In Q2, the company had 8 percent of the worldwide market share, which was at 8.7 at the same time last year. The revenue in the first two quarters of 2019 stood at 95.7 billion RMB which is an increase as compared to 2018.

This has not been the case for Xiaomi alone, but several other Chinese smartphone companies have been seeing themselves losing the grip in the market.

Longer replacement cycles and weak consumer spending are reasons why smartphone makers can’t sell more phones to Chinese consumers. The trade war with the United States didn’t help Chinese tech companies either.

Renown companies like Huawei, Oppo, and Samsung have been growing their market share opposite the competition in 2018.

The market has been decreasing in volume for six consecutive quarters (year-on-year) and is expected to lose more ground in 2019.

The companies are now using new tactics like introducing advanced networks like the 5G to lure consumers back into getting new phones.

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