In recent times, Xiaomi has fallen out of the top three smartphone manufacturers in China in terms of market share. At one point in time, the Chinese company consecutively ranked first or second in each quarter of the year, with its only major competitor being Huawei. Now, the likes of OPPO and Vivo have overtaken Xiaomi in China due to a drop in smartphone sales for the company. However, the company has said that the sharp drop in smartphone sales will not have a major impact on it.
According to a Xiaomi senior executive, the company earns its profit from sale of its smart home devices, along with revenue garnered from its software ecosystem. The firm used to be the world's most valuable startup back in 2014, when it was valued at $46 billion after it held a fundraising round, with many companies investing in it. Since then, the firm hasn't been doing so well, having missed its global smartphone sales target by 12% last year and recently, it was reported that its third-quarter smartphone sales in China has fallen by 45%. In an interview with Reuters, Hugo Barra, the vice president of Xiaomi International, insisted that the business model of the company is not based on money made from smartphone sales and does not see the need in raising more funds for the company or to do an IPO. Hugo also mentioned that Xiaomi is basically selling smartphones without making any profits, but the company only cares about the recurring revenue streams over the years.
Xiaomi has been diversifying its range of home appliances which includes air purifiers, rice cookers, washing machines and security cameras, which all fall under the company's Mi Smart Home category. Products from this category have been said to be the key earning drivers of the company and are highly popular in China. The firm is also set to enter the US market, with the launch of a smartphone which will work on 4G LTE networks in the country to take place in coming months. Xiaomi will be making its debut at CES 2017 which will be held in Las Vegas in January, with plans to launch a new product then.