Friday, March 29, 2024

The mobile phone X AIoT ecological profitability is stronger, and Xiaomi’s new ten-year core strategy has worked


Original title: Mobile phone X AIoT ecological profitability is stronger, Xiaomi’s new ten-year core strategy has worked

After more than a year, Lei Jun’s “Mobile X AIoT” core strategy proposed in the internal letter of Xiaomi’s 10th anniversary has achieved a breakthrough in performance.

On November 23, Xiaomi announced its third quarter 2021 performance report. Total revenue reached RMB 78.1 billion, an increase of 8.2% year-on-year; adjusted net profit reached RMB 5.2 billion, a year-on-year increase of 25.4%. Xiaomi’s smartphone revenue was RMB 47.8 billion, and global smartphone shipments were 43.9 million units.

The breakthrough is not in these growth figures, but in two dimensions closely related to the “Mobile X AIoT” strategy.

High-end machine sales are one of the most eye-catching performances this time. At the beginning of 2020, Xiaomi announced its official entry into the field of high-end devices above 3,000 yuan. In addition to the high-end flagship series represented by Xiaomi 10 and Xiaomi 11, it has also successively launched the technologically full MIX series and the fashionable Civi series, but there is no fairness. The figures can illustrate the effectiveness of this strategy.

At this quarter’s financial report meeting, Xiaomi Group President Wang Xiang shared a set of data: In 2020, Xiaomi’s global shipments of high-end phones will be 10 million units, accounting for less than 8% of the total shipments, compared with the first three in 2021. The quarterly global shipments of high-end machines have reached 18 million, not only surpassing the entire year of last year, but also accounting for 12.8%, which is an increase of more than 50%.

In addition, the high-end route is also beginning to work for acquiring new user groups. According to Wang Xiang, more than 50% of consumers of new models are new users, and more than half of Civi series users are female users.

It is worth noting that Xiaomi’s high-end brand in overseas markets is also constantly advancing, and its smartphone shipments priced at 300 euros and above have increased by more than 180% year-on-year.

In fact, the past three quarters have been the moment when the smartphone supply chain is facing a crisis of shortage. It is not easy for Xiaomi to maintain growth in this situation. However, Wang Xiang believes that although the supply of SoC chips will still be under certain pressure, the situation will gradually improve from the first half of 2022. The challenge that Xiaomi needs to deal with is how to negotiate with suppliers to cope with the balanced development of more than 100 markets around the world. .

In addition to mobile phones, Xiaomi’s new high-end IoT products are gradually gaining market acceptance. On the one hand, Xiaomi smart TVs are still the No. 1 in domestic sales. On the other hand, the high-end smart home appliances that Xiaomi focuses on sales, such as the Mijia Fresh Air Air Conditioner and the Mijia Refrigerator Cross Four-door Exclusive Edition, are selling well.

According to statistics, in November, China’s mobile phone market shipment data Xiaomi ranked second for two weeks, second only to Apple. In the just-concluded Double Eleven shopping season, Xiaomi achieved a record of omni-channel sales breaking 19.3 billion yuan. Among them, mobile phone sales and sales have reached new highs. The entire category of Xiaomi home appliances is ranked third in the JD home appliance peak daily competition list.

In addition to the smart phone high-end strategy, another important piece of good news comes from “AIoT.”

User operating data has been significantly improved in all aspects. The financial report shows that as of September 30, 2021, the number of devices connected to the Xiaomi AIoT platform (excluding smartphones, tablets and laptops) exceeded 400 million for the first time, a year-on-year increase of 33.1%. In September 2021, the number of monthly active users of the Mijia App increased by 39.0% year-on-year to 59.9 million. The number of monthly active users of Xiao Ai reached 105 million, a year-on-year increase of 34.1%.

There is also a data that Wang Xiang called “an important milestone in history”. As of November 22, 2021, Xiaomi’s global MIUI 30-day monthly active users exceeded 500 million. From the beginning of 2021 to the present, the global MIUI has newly added about 100 million monthly active users, and the domestic monthly active users have increased by 18.65 million.

With rising tides, Xiaomi’s Internet service, which is closely related to the scale of users, had revenue of 7.3 billion yuan this quarter, a year-on-year increase of 27.1%, and once again set a new single-season record. Among them, advertising revenue also set a new record, with a year-on-year increase of 44.7% to RMB 4.8 billion, which has achieved chain growth for 7 consecutive quarters.

As an important revenue growth engine, the growth of global user scale has also enhanced the competitiveness of Xiaomi’s overseas Internet business. Its overseas Internet service revenue this quarter reached RMB 1.5 billion, a year-on-year increase of 110%, a record high, accounting for 19.9% ​​of overall Internet service revenue.

From the perspective of revenue to profit, high-end machine series and Internet services are actually two business lines where Xiaomi is easier to increase profit margins. This quarter, the increase in these two revenues directly further improved Xiaomi’s overall gross profit margin.

According to the financial report, the gross profit margin of Xiaomi’s smartphone business in the third quarter was 12.8%, compared with 8.4% in the same period last year, an increase of 52.4% year-on-year; the gross profit margin of Internet services was 73.6%, compared with 60.4% in the same period last year, an increase of 21.9% year-on-year; the overall gross profit margin was 18.3 %, 14.1% in the same period last year, an increase of 29.8%.

Breakthrough is certainly not easy, but it takes more effort to hold on to this momentum. There are still many goals that Xiaomi needs to achieve if it is to continue to spread the influence of “Mobile X AIoT”.

It is needless to say to enhance the basic user experience and brand influence. This is an effective strategy to attract high-end consumer groups.

From a closer look, interconnection is the first hurdle. The number of connected devices on the AIoT platform exceeding 400 million means that Xiaomi needs to further strengthen the interconnection experience and continue to produce diversified and highly connected smart hardware items to enrich and detail the scene, such as the previously launched living room, kitchen and bathroom, etc. Smart door lock X in the scene, Mijia high temperature wireless floor scrubber, cross-border smoke stove set S1 series, etc.

Commercial operation capability is also an indispensable corner, which will be directly seen in the rise and fall of market share. Emerging markets especially need to allocate energy. According to Canalys data, in the third quarter of 2021, the market share of Xiaomi smartphones in Latin America, the Middle East and Africa reached 11.5%, 16.3% and 7.3% respectively. They maintained an upward trend, but compared with Xiaomi’s There is still room for growth in the 21.5% market share of mature markets like Europe.

At present, it seems that the two main starting points for Xiaomi to achieve this goal in overseas markets are the channel capabilities of operators and Internet services. In addition to the direct doubling of overseas Internet service revenue mentioned above, in the third quarter, Xiaomi smartphone shipments exceeded 6.8 million units in overseas operator channels other than India, a year-on-year increase of over 130%; operators in Western Europe The market share of channels rose from 4.6% in the same period last year to 13.0% in the third quarter of this year.

After ensuring these capabilities, Xiaomi’s high-end mobile phone strategy has the opportunity to continue to increase sales, and at the same time drive revenue from pre-installed mobile apps and game apps in addition to its own profits. In fact, the average user revenue per user of Xiaomi games in this quarter has been improved.

Of course, the support behind all this is still Xiaomi’s persistent investment in research and development capabilities. In the first three quarters of this year, Xiaomi’s cumulative R&D expenditure was RMB 9.3 billion, a year-on-year increase of 51.4%; as of September 30, 2021, Xiaomi’s R&D personnel numbered nearly 14,000, accounting for more than 44% of the total number of employees.

Wang Xiang said that Xiaomi previously ranked first in each price segment in the performance evaluation of 5G mobile phones released by China Telecom in November, “reflecting our emphasis on technology and user needs, and this is also the result of our huge investment. one.”

In the next ten years, this will all be the confidence for Xiaomi to implement its core strategy to give full play to its growth momentum.Return to Sohu to see more

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