Xiaomi revenue falls in third quarter as Covid-19 controls bite

Shipments of smartphones in the third quarter fell 11% in China and 9% globally

Chinese smartphone maker Xiaomi Corp on Wednesday reported a 9.7 per cent fall in third-quarter revenue, hit by China's Covid-19 restrictions and softening consumer demand.

Sales in the third quarter reached 70.17 billion yuan ($9.81 billion), down from 78.063 billion yuan the same quarter a year ago, slightly missing analyst expectations of 70.52 billion yuan.

Net income fell 59.1 per cent to 2.12 billion over the period from 5.176 billion yuan one year ago.

China's consumer consumption has remained weak as cities across the country continue to implement lockdowns to prevent the spread of the Omicron variant.

The electronics sector has taken a large hit in turn. Shipments of smartphones in the third quarter fell 11 per cent in China and 9 per cent globally, research firm Canalys has said.

Revenue from smartphones, which make up roughly 60 per cent of Xiaomi's total sales, fell 11.1 per cent year-on-year.

In 2021, Xiaomi saw a sales surge after it grabbed market share from rival Huawei Technologies Co Ltd, whose ability to procure components has been hit by US sanctions.

Yet the boost was short-lived. In May, Xiaomi reported its first-ever quarterly revenue decline since its listing in 2018. In August, revenue for the second quarter fell 20 per cent year-on-year.

Xiaomi's stock price has tumbled nearly 50 per cent since the beginning of the year.

The company has in turn looked to new areas for growth. Last year, it formally announced a foray into electric vehicles, committing to entering mass production in the first half of 2024. ($1 = 7.1545 Chinese yuan renminbi)