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By Ye Er
Source /AI Blue Media (ID:ID:lanmeih001)
Xiaomi has borne the brunt of the overall weakness in the smartphone market.
Xiaomi just released Q3 financial results for 2022, with its total revenue reaching 70.5 billion yuan during the reporting period, down 9.7% year on year; Operating loss of 1.361 billion yuan, from profit to loss, compared with 2.73 billion yuan in the same period last year; Adjusted net profit was 2.1 billion yuan, down 59% from a year earlier.
It can be seen that for Xiaomi, the past three quarters, life is not easy.
Net income revenue continues to decline year-on-year, Xiaomi needs a new breaking point.
And this breaking point, Xiaomi on the manufacturing car.
In this financial report, Xiaomi said that while continuously consolidating the core strategy of mobile phone ×AIoT, it actively invested in the development of innovative businesses such as intelligent electric vehicles, and disclosed that the cost of innovative businesses such as intelligent electric vehicles during the period was 829 million yuan.
Mobile phone overall decline, domestic high-end growth
The year-on-year decline in shipments is a real dilemma that handset manufacturers have to face as they enter 2022.
Xiaomi has not been able to reverse course.
In the third quarter, Xiaomi reported revenue of $42.5 billion from its smartphone division, down 11.1% year on year, mainly due to lower smartphone shipments and ASP.
Among them, the shipment of smart phones was about 40.2 million units, down 8.4% year on year, and the ASP of smart phones also decreased 3% to 1,058 yuan from 1,090 yuan in the same period last year.
This is consistent with the overall market background.
According to newly released data from Canalys, weak demand in the third quarter of 2022 caused global smartphone shipments to fall 9 percent year-on-year to 298 million units. Of the top five handset makers, Apple was the only one to show growth.
Fortunately, Xiaomi is still firmly entrenched in third place globally. According to Canalys, Xiaomi remained in third place in global smartphone shipments in the quarter, with a market share of 13.6 percent.
On the domestic front, there has also been progress.
It is understood that thanks to Xiaomi's continuous layout in the high-end market in 2022, in the third quarter, Xiaomi's smartphone ASP in mainland China increased by about 9% year on year, and the shipments of smartphones over RMB 3,000 yuan increased by about 14% year on year.
But overall gross margins did not improve.
Gross profit margins in Xiaomi's smartphone division fell to 8.9% in the third quarter from 12.8% in the same period last year, the results showed. The reason was increased sales promotion in overseas markets during the quarter, as well as inventory impairment and other impacts.
Internet services revenue fell, MIUI users hit a new high
The high-margin Xiaomi Internet services revenue, the main source of net profit, fell 3.7 percent year-on-year to 7.1 billion yuan in the third quarter, mainly due to lower revenue from its fintech and advertising businesses. Among them, the reduction of pre-installed advertising revenue is directly related to the decline in shipments.
The proportion of overseas Internet service revenue increased further to 24.2%, increasing for six consecutive quarters.
In September 2022, the number of MIUI households in the world reached 564 million, and the number of MIUI households in the Chinese mainland reached 141 million.
Also on this basis, Xiaomi will break the Internet service revenue, bet on the big screen TV.
Statistics show that in September 2022, the monthly active users of MI smart TV (including Mi box and Mi TV stick) exceeded 54 million globally, a record high. Among them, the number of Internet paying members of Mi TV reached 5.5 million in Q3. The average revenue per paying member of TV value-added services increased month-on-month, and the overall revenue of this part in the total domestic Internet service revenue further increased to over 15%.
Continue to increase research and development, cut other expenses
During the quarter, Xiaomi spent 4.1 billion yuan on research and development, up 25.7 percent year on year, thanks to its investment in smart electric vehicles.
In other ways, Xiaomi is interested in reducing costs and increasing efficiency.
Sales and marketing spending remained stable at RMB4.9 billion in the third quarter, with publicity and advertising spending down 9.9% year on year to RMB1.4 billion, the second consecutive quarter of decline, according to the results.
Administrative expenditure, for the first time this year, fell to $1.255 billion compared with $1.275 billion in the same period last year.
It's also worth noting that as we enter 2022, Xiaomi has said that its new retail efforts this year will focus on improving store efficiency in its stores.
This means that after reaching 10,000 + stores in mainland China, store expansion is no longer the main tone.
Xiaomi had 10,500 offline stores in mainland China in the first quarter. Q2 added just 100 to 10,600. By Q3, the expansion had stalled. It was 10,600 as of Sept. 30, in line with Q2, the earnings report showed.
Meanwhile, as of September 30, Xiaomi had invested in more than 400 companies and other long-term investments, with a total book value of 62.1 billion yuan, up 5.0% year on year, according to the financial statement.