Xiaomi's Q2 2016 Results Indicate Trouble In Paradise

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In a market like China, there are tons and tons of customers thirsty for smartphones at every end of the spectrum. From the stalwart iPhone buyers who have to be convinced to look away by something truly spectacular and are willing to spend big on it, all the way down to the uber-budget consumers who want a smartphone to chat with friends and browse the web on the go, if you can think of a segment of the smartphone market, you can likely find consumers somewhere in China that fit in that segment. The country is also awash in technology of all sorts; drones are bought up in massive numbers, cheap VR headsets flow out of shops, and Shenzen-made goodies of all sorts find their way not just around the country, but around the globe.

In a climate like this, rising stars don't just rise – they shoot up, and it happens fast. In at least a few cases, however, they shoot down, too, and that seems to be what's happening to darling Android OEM Xiaomi. When they hit the scene in 2010, their MIUI ROM struck a chord with audiences worldwide and drove sales of the huge number of phones that they would go on to make. After having a great ride through 2014, the "Apple of China" posted a bit more than 70 million units shipped in 2015, far shy of their 100 million goal. Naturally, their financial numbers weren't exactly to die for in the face of rising rivals like Samsung's Chinese presence and local acts like Huawei. The notion that the slump could have been a fluke seems to have been completely debunked with this quarter's report.

Xiaomi's big number for their Q2 2016 report, their total sales, are down about 36 percent year on year from the already far from stellar Q2 2015. While they didn't do as well as they had hoped that year, they at least managed to reclaim their formerly lost top spot in China. Now, to say that they're having a bad year may be a bit of an understatement, though their heads are still above water for the time being. This year, they've lost their spot in the top 3 for the country, replaced by the juggernaut Huawei, the longsuffering OPPO, and the relative newbie to the spotlight Vivo. Xiaomi is poking their heads into a variety of different hardware, but smartphones are their bread and butter, which means that these numbers could be a sign of troubles to come.

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