Xiaomi Corp.’s quarterly sales growth slowed markedly after the Chinese smartphone giant weathered a resurgent Apple Inc. and supply chain mayhem choked off the flow of vital components.
The Beijing-based company expects shortages of the chips that go into its devices and smart appliances to persist well into 2022 before easing around the second half of the year.
Despite the supply crunch, which has walloped adjacent industries from cars to PCs, Xiaomi expects to ship roughly 190 million smartphones in 2021 — a rise of about 29% from last year.
Revenue climbed just 8% to 78 billion yuan ($12.2 billion) in the September quarter, in line with analysts’ projections but well off the 64% pace of the previous three months.
Net income plummeted 84% to 788.6 million yuan after the company took a 3.5 billion yuan hit from losses in investments, echoing major writedowns that its tech peers have reported in a quarter hurt by China’s decelerating economy and market ructions.
Xiaomi has lost more than a third of its value this year as supply chain issues and a resurgence of the Covid pandemic in key markets hindered operations. It briefly surpassed Apple to become the world’s No. 2 smartphone vendor before global shipments slumped in the third quarter, primarily due to component shortages.
The Chinese vendor registered a 4.6% decline in smartphone shipments after high double-digit growth over the previous four quarters as supply issues started to bite, according to research firm International Data Corp. That compared to a 21% surge in shipments from Apple following the release of new iPhones.
Xiaomi is also facing growing pressure in China. Honor, a former sub-brand of sanction-hit Huawei Technologies Co., resumed business with American suppliers from Qualcomm Inc. to Google parent Alphabet Inc. after its spinoff a year ago. The Shenzhen-based firm targets a similar customer group to Xiaomi and has been expanding its brick-and-mortar store network in China in recent months.
Xiaomi is expanding its own offline channels, with plans to open 20,000 more shops on its home turf in three years to counter competition, local media reported this month.