By David Ho
Investing.com - China's Xiaomi (OTC:XIACF) Corp (HK:1810) announced an 8.2% rise in third-quarter revenue on Tuesday. The performance reportedly fell below expectations and is attributed to competition from rival smartphone makers.
Shares fell by 6.96% to HKD19.26 ($2.47) by 11:57 PM ET (4:57 AM GMT).
Xiaomi earns most of its revenue by selling smartphones. It said that its smartphone revenue rose 0.4% to CNY47.8 billion ($7.49 billion) in the three months to Sept. 30.
However, smartphone shipments fell 5.8% on the year in the third quarter to 43.9 million units. The global chip shortage was cited as the reason for the drop.
Xiaomi president Xiang Wang said in an earnings call that the company is "working hard" to obtain supplies for 4G handsets in overseas markets.
He expects the shortage to last until the first half of next year. But he still believes Xiaomi will "maintain very high growth" in 2022.
Overall sales rose to CNY78.06 billion in the third quarter of 2021 but missed a market estimate of CNY79.20 billion from Refinitiv.
Xiaomi had managed to grab market share in China after rival Huawei Technologies Co Ltd retreated from being hit by sanctions. However, it has recently been facing stiff competition from just top-sellers Oppo and Vivo, as well as Huawei spinoff brand Honor.
Honor edged past Xiaomi to grab the No. 3 spot in China’s smartphone market share for the July-September quarter, according to market analyst firm Canalys.
Xiaomi's shipments in China grew just 4% year-on-year in the period, Canalys said. But its overall smartphone sales in the country still fell 5%.
Xiaomi has hit back by focusing on brick-and-mortar retail. Last month, the company opened its 10,000th store in China. It aims to triple the number over the next two to three years.
The company claimed in March that it would spend $10 billion to enter the electric vehicle (EV) market. It now expects to start mass production of EVs in the first half of 2024.
Xiaomi also earns revenue by selling online ads and other types of consumer hardware. Its internet services unit, which makes money mainly through ads across various apps, jumped 27% year on year.
Excluding one-time gains and losses, Xiaomi earned CNY5.18 billion in profit, largely in line with the average analyst expectations for CNY5.09 billion.