Xiaomi sees profits surge as it benefits from Huawei's downfall

Huawei’s market share is falling rapidly in major regions and market research has shown that Xiaomi is benefitting the most. Now, that success has been corroborated by the company’s latest financial results.

Xiaomi continues to eat up Huawei's market share globally

Xiaomi has reported (via Bloomberg) a massive 36.7% year-on-year rise in profit for the quarter ending December 2020. The number hit 3.2 billion yuan ($490.7 million) on revenues of 70.5 billion yuan ($10.8 billion).

Smartphone sales once again accounted for more than half of Xiaomi’s total sales. The brand experienced a 32% surge in shipments during the quarter, while its smartphone sales were up 38.4% over the year-ago quarter, suggesting customers favored more expensive models.

Xiaomi’s level of success has been attributed to its ability to quickly entice Huawei’s lost customers. In China, the company shipped 52% more smartphones in Q4 2020 than in Q4 2019, boosting its market share to almost 15%.

In Europe, Xiaomi has also benefited from the fall of Huawei. Last quarter it solidified its position as the third-largest smartphone manufacturer by volume, behind rivals Apple and Samsung.

The global chip shortage could impact Xiaomi's rate of growth

Despite its recent success, Xiaomi warned of headwinds ahead. The global chip shortages, which are affecting products across a wide range of categories, not just smartphones, will become a big challenge this year and next, according to President Wang Xiang. Nevertheless, the company still expects to post growth this year.