Chinese smartphone maker Xiaomi on Friday reported a record drop in fourth-quarter revenue as the company weathered a slowdown in consumption and disruptions due to China's COVID-19 curbs.
Early signs suggest China's economy will only rebound
slowly, as consumers remain cautious about spending money despite an easing of
restrictions on domestic and international travel.
Xiaomi group president Lu Weibing, speaking on a company
earnings call, said China's consumer electronics was seeing early signs of a
recovery at present but "it will take time."
Year-on-year declines may continue in the first half of the
year before a rebound occurs, he added.
Xiaomi's sales in the fourth quarter of 2022 reached CNY
66.05 billion, down 22.8 percent from CNY 85.58 billion a year earlier.
The numbers were slightly ahead of analyst expectations, but
they mark the fourth consecutive revenue drop for the company, and its steepest
on record yet.
Net income fell to CNY 1.46 billion over the period, down
67.3 percent from CNY 4.473 billion a year earlier.
The company's revenue for 2022 was CNY 280.04 billion, a
drop of 14.7 percent, while net income came in at CNY 8.52 billion, down 61.4
percent. Both figures fell short of analyst expectations.
Smartphone slump
Overall consumption in China dragged on most product categories
in the fourth quarter, as the abrupt lifting of strict COVID-19 curbs led to a
rapid spread in infections across the country.
All major smartphone brands experienced a sales slump in
China over the period, based on research firm Canalys. Xiaomi, however, took
the largest hit with shipments dropping 37 percent year on year, the Canalys
data showed.
China's smartphone sales endured a record fall in 2022, down
14 percent to 287 million units, Canalys data shows. That marked the first time
in ten years shipments fell below 300 million units.
Xiaomi is also facing headwinds in India, where it failed to
notice a rising consumer preference for higher-end devices and ended up losing
its position as the top-selling phone brand to South Korea's Samsung in the fourth
quarter.
The company, along with its rivals, could also face new
security probes from Indian authorities due to national security concerns over
pre-installed apps.
India is Xiaomi's largest overseas market and world's second
biggest market for smartphones.
Xiaomi is also expanding into electric vehicles. The company
said on Friday that it is "on track" to reach its goal of mass
producing its first cars in the first half of 2024. © Reuters
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