Market Focus Shifts to Smartphone and AIOT Businesses Amid Xiaomi's Electric Vehicle Preparations As Xiaomi's electric vehicle launch garners anticipation, market attention remains on its smartphone and AIOT performances over the past year.
Financial Highlights:
- Q4 2023 Performance:
- Total revenue: 73.2 billion RMB, a 10.9% year-on-year increase.
- Adjusted net profit: 4.9 billion RMB, a remarkable 236.1% year-on-year growth.
- Notably, innovative businesses like smart electric vehicles incurred expenses of 2.4 billion RMB during Q4 2023.
- Full Year 2023:
- Adjusted net profit surged by 126.3% to 19.3 billion RMB.
- Total revenue slightly dipped by 3.2% to 271 billion RMB.
Smartphone Business Achievements:
- In 2023, Xiaomi shipped 146 million smartphones globally, maintaining a top-three position worldwide, following Apple and Samsung, and became the leading domestic brand.
- Xiaomi secured a 12.8% global market share across 51 markets, ranking in the top three, and among the top five in 65 markets.
- Q3 2023 witnessed the peak annual shipment of 415 million units, largely attributed to Xiaomi's flagship products. The momentum continued in Q4 with shipments surpassing 40 million units, showcasing robust market competitiveness.
Premiumization and Market Share Gains:
- Despite challenges from Huawei and OPPO/Vivo, Xiaomi's market share significantly increased in the 4000-6000 RMB price segment, affirming its stronghold.
- Impressively, Xiaomi observed nearly a 20% increase in Average Selling Price (ASP) in the premium segment, contrasting with its perception as a champion of the mid-to-low-end market.
- Effective destocking strategies amidst low material prices bolstered Xiaomi's gross margin, despite the competitive landscape.
AIOT Growth and Strategic Investments:
- Xiaomi's AIOT platform saw a surge in global monthly active users, reaching a historical high of 641.2 million in December 2023, marking a 10.2% year-on-year increase.
- IoT device connections on Xiaomi's platform surged to 739.7 million by December 31, 2023, registering a robust 25.5% year-on-year growth.
- The company continued its robust investment in research and development, allocating 19.1 billion RMB and increasing its R&D staff to 17,800, accounting for 53% of its workforce.
Forward Strategy and Challenges:
- Xiaomi Group President, Lu Weibing, underscored a prudent yet proactive strategy for 2024 amid a tepid global consumer electronics market recovery.
- Supply chain component price hikes may affect smartphone business margins, but IoT product margins are expected to improve.
- Maintaining overall gross margin stability remains Xiaomi's goal, although achieving this amidst evolving business prospects poses challenges.
In conclusion, while Xiaomi's Q4 2023 and full-year performance reflect commendable growth in smartphone shipments, premiumization efforts, and AIOT expansion, sustaining profitability amid competitive pressures and shifting market dynamics remains pivotal. Xiaomi's foray into electric vehicles adds further complexity, necessitating agile strategic maneuvers to navigate uncertainties and capitalize on emerging opportunities.
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