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Investors Starting To Doubt Xiaomi Following Sales Target Miss

January 11, 2016 - Written By Kristijan Lucic

Xiaomi is one of China’s largest smartphone manufacturers. This company has released a ton of devices in 2015, ranging from smartphones and fitness trackers to other smart gadgets. Xiaomi has managed to grow extremely fast, they’ve managed to become China’s number one smartphone manufacturer in less than 5 years since they were founded, this was at the beginning of 2015. Xiaomi grew even further until the end of the year, and is constantly battling Huawei for the number one spot in China.

That being said, Xiaomi has raised a ton of cash in investments from various companies ($1.1 billion in December 2014, to be exact), and they need to fulfill expectations. Xiaomi aims to expand further this year, and we’ll see how will that go for them. The company has missed their 80-million smartphone sales target in 2015, even though they came close to that number. Considering that China’s economy is slowing down, the smartphone sales are also taking a hit. Now, it remains to be seen how will Xiaomi fight through this considering China is still their main market, by far. “With China’s economy slowing, many startups will need to be more cautious in their expansion strategies,” said Nicole Peng, an analyst from Canalys, a market research company. Now, as we said, Xiaomi has missed their sales target in 2015, which was enough for investors to start questioning this Chinese company. “The competition in China’s smartphone market has intensified tremendously this year,” said a Xiaomi’s spokeswoman. She has actually refused to comment on the company’s valuation, and did not disclose how many device Xiaomi has sold last year.

Now, the fact that the company missed their sales goal might make sense to some of you, but keep in mind that Xiaomi was expected to release their Mi 5 flagship in July 2015, and that didn’t happen. The company has decided to postpone the launch of that handset, and wait for the Snapdragon 820 to become available, and the company’s flagship Mi series of devices is at the same time one of their best selling lines of smartphones. Xiaomi is aiming to reach various markets around the world in the future, and it seems like the U.S. market is next, everything points to that fact. The company’s CEO hinted that Xiaomi will sell their devices in the U.S., and some of Xiaomi’s handset have already been certified by the FCC. It certainly won’t be easy for Xiaomi to succeed in the U.S. or Europe, but we’ll see what happens once they arrive to either of the two markets. Stay tuned for additional news, Mi 5 is expected to launch in the coming weeks, and we also expect to hear more about the company’s expansion soon as well.

Xiaomi sales and valuation, WSJ_1