Xiaomi Corporation, a consumer electronics and smart manufacturing company, with smartphones and smart hardware connected by the Internet of Things (IoT) platform. Posted on unaudited consolidated results for the three and six months ended 30 June 2022. In the reporting period, Xiaomi recorded RMB 70.2 billion (£4.1 trillion). Adjusted net profit reached RMB2.1 billion (Ft125 billion), which included RMB611 million (Ft36 billion) of expenses related to smart electric vehicles and other new initiatives.
In the second quarter of 2022, global macroeconomic turbulence and the resurgence of COVID-19 continued to impact overall market demand for smartphones, with global smartphone shipments falling by 8.9% year-on-year and 7.7% quarter-on-quarter. In this context, the Group continued to focus on its predefined strategies to strengthen the foundation of the smartphone business, further develop Xiaomi's technology ecosystem, and strengthen its foothold in global markets, demonstrating strong operational resilience.
Global strategy pays off as smartphone shipments grow for two consecutive quarters
In the first half of 2022, global smartphone shipments fell by 8.9% year-on-year and by 7.7% quarter-on-quarter. Despite the challenge, Xiaomi remains committed to its core strategies for long-term and sustainable development. As Xiaomi continues to develop its dual-brand strategy, the fundamentals of its smartphone business have shown extraordinary resilience.
In the second quarter of 2022, Xiaomi's smartphone revenue reached RMB42.3 billion (2.5 trillion), and global smartphone shipments reached 39.1 million units, an increase of 1.51T3T from the previous quarter. According to Canalys, Xiaomi's global smartphone shipments ranked No.3 in Q2 with a market share of 13.8%, and its market share has increased for two consecutive quarters.
Meanwhile, the strength of Xiaomi's international brand continues to consolidate as it gradually expands its foothold in global markets.In the second quarter of 2022, Xiaomi's revenue from overseas markets reached RMB 34 billion ($2 trillion), accounting for 48.41T$3.3T of total revenue.
Leveraging Xiaomi's mature business model and localization expertise, the Group's market share in Europe, Latin America, Southeast Asia, Middle East and Africa grew quarter on quarter. According to Canalys, in Q2 2022, Xiaomi's smartphone shipments ranked in the top 3 in 55 countries and regions and in the top 5 in 67 countries and regions.In Q2 2022, Xiaomi's smartphone shipments ranked 2nd in Europe with a market share of 21.7%, 3rd in Western Europe with a market share of 15.8%, and 1st in Spain.
Meanwhile, Xiaomi continues to make inroads into the overseas service channel. According to Canalys, the group's European service channel market share increased from 17.0% in the first quarter to 18% in the second quarter of 2022. Xiaomi's service channel market share in Latin America grew from 17.7% to 19.3% in the same period. According to Canalys, Xiaomi's smartphone market share through service channels ranks in the top three in 40 overseas markets.
Xiaomi continues to be recognised worldwide.In August 2022, Xiaomi was ranked in the Fortune Global 500 for the fourth consecutive year, coming in at number 266, up 72 places from 2021. By capitalizing on opportunities to expand its business through market localization efforts, the development of its global market presence is expected to create tremendous growth opportunities for Xiaomi.
Accelerating R&D investment to increase the premium
Xiaomi strives for technological innovation and quality development, and is committed to strengthening its independent R&D capabilities and enhancing its core competitiveness.In Q2 2022, its R&D expenditure reached RMB 3.8 billion (HUF 226 billion), an annual growth of 22.81T$3.3T. At the latest Xiaomi product launch event Xiaomi CEO, founder, chairman and CEO of Xiaomi Group, revealed that Xiaomi's R&D investment has increased by 39.71T$3T since 2017 and is expected to reach RMB 17 billion (£1 trillion) in 2022 and RMB 100 billion (£5.9 trillion) in the next period.
During the period under review, Xiaomi not only introduced its proprietary Surge G1 battery management chip to optimise battery life in smartphone products, but also further enhanced its premium strategy with significant breakthroughs in imaging technology and smartphone form factors.
In May 2022, Xiaomi announced its long-term strategic partnership with Leica in imaging technology, marking another milestone in Xiaomi's premium development.In July 2022, Xiaomi announced its first Leica model, the Xiaomi 12S Ultra. It features Leica Summicron lenses and a Sony IMX989 one-inch image sensor, as well as Leica Authentic Look and Leica Vibrant Look imaging profiles, which deliver a highly textured smartphone photography experience. With the launch of the Xiaomi 12S series, the third generation of Xiaomi's high-end, "performance first, experience first" is fully released. According to the JD platform, the Xiaomi 12S series has been well received by the market, with over 98% of reviews so far positive.
Xiaomi's second-generation foldable flagship, the Xiaomi MIX Fold 2, was unveiled on 11 August and once again pushes the boundaries of the premium market. The product features a proprietary Micro Waterdrop hinge and flexible ultra-thin glass to deliver a revolutionary ultra-thin design and a delightful hand-holding experience. Xiaomi MIX Fold 2 is equipped with a flexible Eco2 OLED display that greatly increases light transmission while reducing power consumption. It's also equipped with Snapdragon 8+ Gen 1 Mobile Platform processor, Leica Summicron lenses and MIUI Fold 13, which is specifically designed for foldable smartphones. Xiaomi MIX Fold 2 offers outstanding performance and an exceptional user experience across display, imaging and software, and has seen strong sales since launch.
According to third-party data, in the second quarter, Xiaomi's smartphone market share in the RMB 3,000 to RMB 4,000 ($180-240,000) price segment in China increased by 3.5 percentage points year-on-year to 18.2%, while its market share in the RMB 4,000 to RMB 5,000 ($240-300,000) price segment increased by 2.0 percentage points year-on-year to 15.5%. The development of Xiaomi's premium strategy has become a driving force contributing to its solid growth.
In addition, Xiaomi is relentlessly exploring the future and focusing on sharing the long-term value of technology. Currently, Xiaomi is taking a proprietary, full-stack approach to self-driving technology. The Group plans to invest RMB 3.3 billion (£197 billion) in autonomous driving research and development in the first phase, during which it will build a fleet of 140 test vehicles to further realize technological breakthroughs. The robotics laboratory, established in 2021, has achieved groundbreaking results. On 11 August, Xiaomi launched its proprietary full-size humanoid bionic robot, CyberOne, which supports bipedal posture balancing through mechanical joint motors and full-body control algorithms. It can also sense human emotions and create three-dimensional virtual reconstructions of the real world using proprietary audio-vision modules and algorithms. This series of proprietary high-tech products fully demonstrates Xiaomi's technological leadership and will help to develop and enhance Xiaomi's premium service capabilities.
Shaping the new "Xiaomi technology ecosystem" to strengthen the era of smart living
Driven by innovation, Xiaomi has further developed its "Smartphone x AIoT" strategy to create the era of smart living. The company is building an ever-expanding technology ecosystem spanning smartphones, wearables, smart homes, smart manufacturing, smart electric vehicles and bionic robots to better connect people to the world around them and improve their lives. In parallel with the development, the Group has launched a range of new products including the Mijia Dual-Drum Washer Dryer 15kg , Xiaomi Pad 5 Pro 12.4 , Xiaomi Buds 4 Pro , Xiaomi Watch S1 Pro and Mijia Smart Smoke Purifier P1, which highlight premium experiences and capabilities.
On 30 June 2022, the number of connected IoT devices (excluding smartphones, tablets and laptops) on Xiaomi's AIoT platform reached 526.9 million, an increase of 40.7% year-on-year. The number of users with five or more devices (excluding smartphones, tablets and laptops) for the AIoT platform exceeded 10 million for the first time, reaching 10.2 million, an increase of 37.0% year-on-year.
Xiaomi will continue to improve connectivity across all usage scenarios and expand its diversified smart lifestyle product portfolio.In Q2 2022, Xiaomi's revenue from IoT and lifestyle products was RMB 19.8 billion ($1.2 trillion). Although demand for discretionary items in overseas markets was weak in the short term due to macroeconomic factors, many IoT product categories in the domestic market continued to achieve solid growth.
A Xiaomi okostévék globális kiszállítása elérte a 2,6 millió darabot, ami felülmúlja a globális TV-piac általános hanyatlását, köszönhetően a csoport méretgazdaságossági előnyeinek és a kulcsfontosságú alkatrészek alacsonyabb árának. Az okostévé üzletág bruttó haszonkulcsa jelentősen nőtt a második negyedévben az előző év azonos időszakához képest. Az All View Cloud (“AVC”) szerint a Xiaomi okostévé-szállítmányok az 1. helyet foglalták el Kínában, és 2022 második negyedévében is megőrizték az első öt világranglistát.
The large smart home appliances category (including air conditioners, refrigerators and washing machines) continued to show strong growth, with revenues up by more than €251T3T compared to the same period last year, a record high. Xiaomi's air conditioner shipments increased by more than 35%. It is worth noting that in July 2022, the company's air conditioner shipments already exceeded 2 million units in 2021, while in the first half of 2022, total tablet shipments exceeded 1.5 million units.
Revenue generation from overseas internet services boosted by record high MIUI MAUs
Despite the challenges posed by the macroeconomic headwinds, Xiaomi's internet services business has achieved rapid growth, underpinned by a steady increase in its user base and stronger content and services activity.
In the second quarter of 2022, Xiaomi's internet service revenue reached RMB7.0 billion (US$418 billion). Overseas internet service revenue reached a quarterly high of RMB1.7 billion (US$101 billion), an increase of 52.11TTPRK year-on-year, accounting for 23.91TPRK of total internet service revenue. Its overseas Internet service business not only diversified its revenue generation capabilities, but also maintained its growth resilience amid macroeconomic uncertainties and is expected to further optimize the company's profitability.
The continuous growth of MIUI MAUs has increased the resilience of Xiaomi's Internet services business, laying a solid foundation for its long-term growth.In June 2022, MIUI's global MAUs reached 547.0 million, while in mainland China, MIUI's MAUs reached 140.2 million, both at record highs. The Group added 17.8 million MAUs to MIUI worldwide, including 4.6 million MAUs in Mainland China.
Overseas advertising revenues grew by more than $501T3T year-on-year this quarter, driven mainly by continued growth in the overseas user base, enhanced content and services, and closer collaboration with the company's global business partners.
Driven by smart TV shipments, Xiaomi's TV Internet user base continued its strong growth momentum in the second quarter.In June 2022, the global MAU of Xiaomi smart TVs (including Xiaomi Box and Xiaomi TV Stick) reached 53 million. Due to optimized content operations, revenue from value-added services for mainland Chinese TV increased by nearly $25% year-on-year in this quarter.
In the second quarter of 2022, Xiaomi's resilience, underpinned by proven capabilities, has reinforced market confidence amid temporary economic volatility and slowing demand. Meanwhile, Xiaomi has continued to enjoy strong organic growth momentum, enabling the company to navigate short-term volatility and transform its long-term development.
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