According to Counterpoint Research, in the first quarter of 2022 Xiaomi achieved a historic result – the number of active users of its smartphones exceeded 500 million people. The Chinese brand has firmly inscribed itself in the top 3 of the world market leaders on an equal footing with Samsung and Apple.
In recent years, the company has developed from a regional manufacturer of budget smartphones into a global player with a strong position in the premium smartphone market. Although the company is already well known in many regional markets, global brand awareness has been somewhat aided by the COVID-19 pandemic. A particularly strong breakthrough came from India, where Xiaomi became the largest smartphone maker in the first quarter of 2022, while ranking third in the rest of the world outside of India and China.
A significant part of the seller’s income is “Internet services”, mainly advertising. In 2021, the total revenue from this segment reached $4.16 billion. At the same time, service revenues in China are much higher than in any other regional market, and users of premium smartphones are higher than users of budget models.
According to Xiaomi, 80% of internet service revenue comes from China, the main source of revenue in this segment is advertising. It’s hard to predict whether the company will be able to compete with giants like Google in the services market outside of China without sharing revenues with the latter.
In theory, Xiaomi’s large user base should help the brand advance, and this will give the company more opportunities to monetize traffic on its smartphones. In addition, the record-breaking performance helps sell products from related market segments such as IoT devices, wireless headphones, and smart watches more effectively.
The company already has a developed ecosystem of Internet of Things and connected devices, from robotic vacuum cleaners to wireless headphones. But she still fails to make the most of her popularity. In the same India, where Xiaomi is the largest manufacturer on the market, the company does not even make the top 5 in terms of shipments of smartwatches and headphones, although shipments of smartwatches here have increased by 274% over the year, and wireless headphones by 60%. It’s possible that markets like the Indian company may at some point need to reconsider their strategy, including pricing and how often the product range is updated.