Xiaomi has just released its unaudited financial results for the second quarter of 2024, covering the three months ending in June. The Chinese electronics giant is showing positive momentum, with consecutive quarters of growth highlighting its continued expansion in key product areas.
On August 22, 2024, Xiaomi announced Q2 revenue of CNY88.9 billion (S$16.29 billion), a 32% YoY increase. The resulting adjusted net profit of CNY6.2 billion (S$1.14 billion) is also 20.1% higher than the same period in the previous year.
You might think that Xiaomi’s burgeoning electric vehicle (EV) efforts are the primary driver of these impressive figures. However, the company has made it clear that its EV business and other new initiatives contributed only CNY8.3 billion, a small fraction of the total revenue for the quarter. So, what exactly is driving Xiaomi’s strong performance this year?
Smartphone sales lead the charge
Xiaomi’s smartphone business continues to be a powerhouse, generating CNY46.5 billion in revenue, a 27.1% increase from the previous year’s quarter. According to Canalys, Xiaomi has maintained its position among the top three smartphone brands globally for the 16th consecutive quarter, underscoring its dominance in the market.
The company has consistently produced high-quality smartphones, including the Xiaomi 14 Ultra, a finalist for Best Premium Android Smartphone at the Tech Awards 2024. Meanwhile, the Xiaomi 14 won in the Best High-End Android Smartphone category. These achievements suggest that Xiaomi has successfully shed its budget-friendly image and built a strong presence in the premium smartphone market.
However, the real story might lie in Xiaomi’s midrange and entry-level phones, which continue to perform robustly. Xiaomi revealed that its premium smartphones, priced at CNY3,000 and above, made up 22.1% of total smartphone shipments in mainland China. Additionally, the brand has seen accelerated growth in regions such as Latin America, Southeast Asia, the Middle East, and Africa, which could signal more attention to these markets in the future.
Another key driver of Xiaomi’s recent success is its IoT (Internet of Things) and lifestyle products division, which reported a record-high revenue of CNY26.8 billion, a 20.3% year-on-year increase. The standout performer here is Xiaomi’s air conditioner segment, which saw shipments exceed 3.3 million units, marking a 40% increase from the previous year.
Moreover, Xiaomi’s refrigerators and washing machines also contributed to the growth, with 600,000 and 400,000 units shipped, respectively. This raises the question of what Xiaomi is doing right with its smart home appliances, which resonate with consumers.
EV deliveries are on the rise
While Xiaomi’s electric vehicle business is still a small part of its overall revenue, it’s not without its successes. In Q2 2024, Xiaomi delivered 27,307 units of its Xiaomi SU7 series electric vehicles, including more than 10,000 units in the last two months of the quarter.
Xiaomi is confident in its ability to meet the growing demand for EVs, even as some markets struggle with affordability and infrastructure issues. The company aims to deliver 100,000 EVs by November, ahead of its initial schedule. It plans to continue investing heavily in technology and product development to stay competitive in this rapidly evolving market.
Looking ahead, Xiaomi has announced that it will unveil a prototype of the Xiaomi SU7 Ultra in October 2024, with more details to follow.
AI innovations
Finally, Xiaomi is making strides in artificial intelligence (AI), particularly in its smart EV business. The company has invested CNY5.5 billion in AI research and development, a 20.7% increase from the previous year.
Xiaomi has expanded the capabilities of its smartphone AI Assistant to include document analytics and AI video generation. These features are not yet available on current premium Xiaomi smartphones, so it will be interesting to see how they perform once they are rolled out.
