Xiaomi reported increased revenue and higher profits during the third quarter of 2022, but ongoing chip shortages affecting the industry and intense competition in the market meant the figures were not as high as some had predicted.
The company’s figures showed revenue rose 8.2% to 78.1 billion yuan during the three-month period, while profit before tax rose 25.4% to 5.2 billion yuan. However, the growth rate has been slow as compared to the recent quarters.
Xiaomi replaced Apple as the world’s second-largest manufacturer earlier this year, thanks to Huawei’s well-documented struggles in gaining access to US technologies due to international expansion and an increased share in China.
However, it is competing for the same market as fellow Chinese vendors Oppo, Vivo and now Honor, which was spun off from Huawei last year to become an independent entity. Compounding these challenges is a chip shortage that is stifling production.
Xiaomi President Wang Jiang said he is satisfied with the company’s performance so far this year, considering the shortfall will continue well into 2022. However, he acknowledged that the situation was becoming more challenging.
“Despite dire supply conditions, we achieved record high shipments in the first three quarters,” he told investors. “We are working closely with our suppliers to achieve [as many components] As far as possible.
“Unfortunately, we will see some structural challenges in the first half of 2022, but the supply situation will improve greatly.”
Xiaomi is not alone in tackling the shortage, which is affecting the middle and low end of the market more than the premium segment. Shipments declined 6.8% during Q3 as manufacturers struggled to get their hands on components such as radio frequency units, power management circuits and other chips.
Gartner says Xiaomi increased its market share from 12.1% to 13.1% during this period – despite sales being flat – making it the world’s third-largest manufacturer.
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