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World’s 3rd Largest Smartphone Maker, Xiaomi, Made Only $56M in Profits Last Year

Redmi 1 1 0 0 0 0 0 0 0

It comes as disappointing news and most of all surprising news that such a famous smart phone manufacturer,even nicknamed “China’s Apple” made such a small profit figure after all the hype and excitement about its Products.Its just few months ago that reports of Apple losing its market shares significantly to the Smart phone developer,Xiaomi hit headlines in China and globally.Its notable and evident that Xiaomi is famous for selling smartphones with killer specs at ridiculously low prices, an apparent attempt by the company to increase its market share at the expense of profit. Its cheapest smartphone, the Redmi 1S, starts at 699 yuan ($114), and its latest flagship model, the Mi4, retails at 1,999 yuan ($327). The company also manages to keep its marketing costs low by counting on fans for social-media PR.

Stat reports released by the Company suggest however not much satisfying news or healthy profit margins.The Company acoording to its latest reports made just 347.48 million yuan ($56.15 million) of profit on 26.58 billion yuan ($4.30 billion) in revenue last year, according to Reuters. The information was obtained from the financial results that the company disclosed after it purchased a 1.3 percent stake in home appliance maker Midea for 1.27 billion yuan ($205 million).

This is in complete disagreement with a contrast by Wall street Journal report which claimed that Xiaomi’s net profit nearly doubled last year, rising 84 percent to 3.46 billion yuan ($566 million) from 1.88 billion yuan in 2012. The paper called it “a lucrative business in an industry where most players selling cheap handsets struggle to break even.”Whats even more surprising is the fact that the best rated “China Apple Phone” the Xiaomi number one smartphone manufacturer in China, the four-year-old startup, which recently became the world’s third largest smartphone company, still lags far behind the likes of Samsung and Apple in terms of revenue and profits. Just to give you an idea, Apple made around $25.4 billion (nearly six times) in revenue in Greater China during the same period.

About author

Editor at TechArena. I cover all things technology and review new gadgets as I get them. You can reach me on email: kaluka@techarena.co.ke
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