Menu
Xiaomi misses handset shipment goal, hit by dependence on slowing Chinese market

Xiaomi misses handset shipment goal, hit by dependence on slowing Chinese market

The company sold 70 million phones in 2015, less than its forecast of at least 80 million

Xiaomi said Friday it shipped over 70 million smartphones in 2015, short of an ambitious target it had announced last year, amid growing competition and high dependence on the Chinese market.

The Chinese company had forecast last year that it would sell at least 80 million phones during the year. It had sold 34.7 million handsets during the first half of the year.

Growth in smartphone sales is slowing down in China because of saturation of the market, said Anshul Gupta, research director at Gartner. Xiaomi is also facing stiff competition from other players who have copied the company's strategy based on online sales, content and exclusive apps, he added.

Research firm Canalys said in October that Huawei had overtaken Xiaomi as China’s top smart phone vendor in the third quarter of last year. Xiaomi fell to second place after its shipments shrank year on year. Xiaomi is under tremendous pressure to keep growing as an international player as it slows down in its key home market, the research firm added.

About 90 percent of Xiaomi's sales have come from China, said Neil Shah, research director at Counterpoint Research. The company, which had acquired a star status because of its meteoric growth and aggressive publicity campaigns, has tried to reduce its dependence on the Chinese market, selling in other markets such as India, Indonesia and the Philippines.

But other than in China and India, its performance in markets it has entered has been lackluster, Shah said. Even in India, it is not among the top five as it faces competition from established local and foreign brands who have been quick to match Xiaomi's online sales strategy, he added.

Xiaomi offers an app ecosystem, which has proven to be attractive in China where the Google Play store is banned, but this has not helped the company in India and other markets where Google Play is available, Shah said.

The company has delayed its expansion in the U.S. and Europe largely because of concerns about intellectual property litigation and license fees in those countries, which will add to cost, Gupta said. In India, for example, the company ran into a patent dispute with Ericsson shortly after its entry into the market.

"China protects a lot of these companies and they know that once they step out of China, the lawyers of their rivals will be waiting," Shah said.

Hugo Barra, vice president of Xiaomi's global division, said early last year that the company was building up a patent war chest as well as taking licenses around the world ahead of a global launch. Xiaomi recently signed a licensing agreement with Qualcomm on 3G and 4G patents.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments