China’s Xiaomi made a meager $56 million profit in 2013

“Privately owned Xiaomi Technology Ltd Co [XTC.UL] booked 347.5 million yuan ($56 million) in net profit last year, according to a regulatory filing that showed the world’s No.3 smartphone maker grappling razor-thin margins,” Gerry Shih reports for Reuters.

“The figure casts new light on the growth of a company that reached third place in just four years thanks to handsets lauded for balancing quality and affordability. Only this month did momentum finally stall when a patent challenge in India halted sales,” Shih reports. “Valued by private investors at more than $10 billion, Xiaomi recorded revenue of 26.6 billion yuan and an operating margin of just 1.8 percent.”

“Apple reported 28.7 percent [operating margin] for the business year ended September 2013. LG Electronics Inc’s (066570.KS) mobile business posted a margin of just 0.5 percent,” Shih reports. “South Korea’s LG lost its position as the world’s third-biggest smartphone maker during the third quarter of this year when Xiaomi claimed a global market share of 5.6 percent, according to Strategy Analytics.”

Read more in the full article here.

MacDailyNews Take: Ranking companies as “biggest” based on units is a fool’s errand.

Xiaomi, with their iPhone knockoffs, not making it up in volume.

Related article:
Apple iPhone continues utter domination with 86% share of handset industry profits – November 4, 2014

11 Comments

  1. As the  executive stated during a conference, “anyone can say they want to be #1, getting there and maintaining that position is much harder said than done.”

    Welcome to the “real world” copycat.

    1. Many OEM’s can get to number 1 when it comes to shipped devices if you’re willing to decimate your margins, quality, etc. Can you push volume and maintain strong margins at the same time? Apple is the only one that can do that over the long term. They focus on making great products first and foremost which is the key to longterm stability both is volume and profits. Just ask Samsung how volume strategy is working out…just not sustainable.

  2. There are many that criticize Apple’s high prices, yours truly included. However when you look at these articles of their competitors fortunes, and how such huge volumes result in such meager results it’s hard to say that Apple is overpriced when they sell just about all they can make and make a nice return to boot.

  3. That is a scary business these guys have going.

    On one hand you want to say well heck, at least they are profitable, but on the other hand all it would take is a couple of legal hand grenades thrown in a courtroom and this outfit would be wiped out in the profit department.

  4. “Meager” or not, it’s still a profit… While others just bite the dust.
    So, of course, Xiaomi is not Apple and just another follower amongst a bunch, it can yet create a nice base of smartphone users. Too poor for an iPhone, by now, but wealth can come along with time.

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