Xiaomi recorded increased revenues and higher profits during the third quarter of 2022, but the ongoing chip shortage affecting the industry and intense competition in the market meant the figures were not quite as high as some had predicted.
The company’s figures show revenues rose by 8.2% to 78.1 billion Yuan during the three-month period, while pre-tax profits jumped by 25.4% to 5.2 billion Yuan. However, the rate of growth has slowed when compared to recent quarters.
Xiaomi briefly supplanted Apple as the world’s second largest manufacturer earlier this year, boosted by international expansion and an increased share in China thanks to rival Huawei’s well-documented struggles in gaining access to US technologies.
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 impacting production.
Xiaomi President Wang Xiang said he was satisfied with the company’s performance so far this year given the shortages, which he predicts will continue well into 2022. However, he acknowledged that the situation was becoming more challenging.
“Even with the serious supply situation we achieved record high shipments in the first three quarters,” he told investors. “We are working very closely with our suppliers to get [as many components] as possible.
“Unfortunately, we will see some structural challenges in the first half of 2022 but the supply situation will be very much improved.”
Xiaomi is not alone in having to deal with the shortage, which is affecting the mid and low ends of the market more than the premium segment. Shipments fell by 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 during the period from 12.1% to 13.1% - despite sales remaining flat – making it the world’s third biggest manufacturer.
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