If we can grasp the rhythm and product definition next year, Xiaomi may not have the possibility of counterattack.
Xiaomi’s smartphone revenue has experienced negative growth for the first time.
This does not seem to be unexpected. According to data released by IDC, Xiaomi’s shipments in the third quarter fell by 30.5% and have fallen below 10 million units. Moreover, the distance between it and the top three is getting wider and wider. In the third quarter, shipments were one quarter of Huawei’s and about half of OV’s.
This is an ominous sign for Xiaomi. Although the IoT business is performing well, it still needs time to allow its IoT products to exist independently of mobile phones. Xiaomi’s brand also relies on smart phones, and Lei Jun also mentioned the mobile phone business in the 5G era in his recent speech, and also said that at least 10 5G mobile phones will be released next year.
Xiaomi’s overall revenue rate is also declining. In the third quarter of last year, Xiaomi’s revenue growth rate reached 49.1%. This quarter fell to single digits, both year-on-year and month-on-month. Although Xiaomi’s explanation for this is to move towards a conservative strategy and wait for the outbreak of 5G, Xiaomi is facing Huawei with deeper technology accumulation, IQOO with great vision, and Reno of OPPO. All three are indispensable on 5G Contention. In today’s different era of 4G handset replacement, it is not so easy for Xiaomi to grab the banner of 5G handset replacement.
However, the development of Xiaomi IoT is booming, and it has somewhat eased the decline of mobile phones. Since the concept of “Super Internet” was proposed, Xiaomi is more or less diluting the smart phone business, but now the mobile phone is still the anchor of Xiaomi. Once it is still so bleak next year, Xiaomi’s price-earnings ratio and ambition cannot be supported by IoT alone.
But this also seems to be one of the few imaginative growth points for Xiaomi. AIoT has also become one of Xiaomi’s most critical propositions now.
Enemies on the back of the phone
Throughout 2019, Huawei has been scoring in the Chinese market with a double-digit rate. The other three manufacturers, including Xiaomi, have suffered a lot. They all fell in the double-digits in the third quarter. Shipments almost caught up with the sum of the other three.
The market is so unfavorable, and Xiaomi’s decline is understandable. However, the situation facing Xiaomi is even more serious than OV: the blue and green factories have begun to attack Xiaomi’s territory.
Vivo released a new brand IQOO this year. The layout of the new product is fast. The main product was released in March with a configuration similar to Xiaomi 9. The price is 1 yuan cheaper than Xiaomi. The neo version was released in July. The pro 5G version released in August directly brought 5G The price of mobile phones has dropped below 4,000 yuan. Vivo’s action this year can be said to be quite radical.
The OPPO also changed its own pass, the new Reno series launched Ace, began to set up the configuration, the price is also stuck at the Xiaomi Mi 9 just released 2999 yuan. Online brand realme has returned from overseas, and it has never been better than Xiaomi in stacking.Without , the close-to-hand combat red rice, even OnePlus seems to be a lot closer to the people, and the price of the 7 series also starts from 2999 yuan.
The speed of opponents launching new machines is getting faster and faster. The OV that originally issued two or three mobile phones a year also seems to have started the sea tactics this year. Reno has released 3 products in half a year, and the fourth Reno 3 is coming release. OV’s extra sub-brands and new product lines have undoubtedly affected Xiaomi.
Moreover, Xiaomi is half a beat slower than vivo in product layout this year, and 5G mobile phones are one month behind IQOO. This is a very critical month. According to IDC data, 5G mobile phone shipments are very few, only 485,000 units. However, vivo ate 54% of the share, and Xiaomi did not grab the first wave of dividends.
Of course, this does not mean that Xiaomi has no chance of rising after this. 5G has just been commercialized in 2019, and various vendors are rushing to sell or wait and see. The market is only in the brewing stage. Hundreds of thousands of shipments have little reference value. The smoke of 5G mobile phones will not really ignite until 2020. Lei Jun once stated that Xiaomi will launch 10 5G mobile phones in 2020, and the K30 propaganda map equipped with dual-mode chips has also flowed out, which shows Xiaomi’s urgency on the 5G layout. If we can grasp the rhythm and product definition next year, Xiaomi may not have the possibility of counterattack.
The problem that Xiaomi mobile phones also face is that the domestic offline market has been slow and ineffective. The online market has peaked, and it is difficult to have a big increase. OV is still desperately eating Xiaomi’s existing e-commerce share. The future increase may be from offline. However, in this financial report, Xiaomi did not highlight Xiaomi Home in its performance. Since Lei Jun took over China, Xiaomi is adjusting its offline strategy. Xiaomi’s House is popular with commercial real estate because of its many SKUs, but Huawei and OV are now grabbing shopping malls. Xiaomi has a first-mover advantage. Whether it can hold it is unknown.
IoT is still a star
Zhou Shouzi said in a conference call that the future of the super Internet will be “off the phone” and focus on smart hardware. This financial report also reflects this point. Mobile phone revenue has fallen, but the proportion of IoT is increasing, which is already close to 30%. In the Mijia app, users of non-Xiaomi mobile phones account for 63%, which means that the IoT is becoming self-contained.
The number of IoT users is also surging. As of September 30, 2019, the number of IoT devices connected to the IoT platform, excluding smartphones and laptops, reached 210 million units, a year-on-year increase of 62.0%. The number of users (excluding smartphones and laptops) with 5 or more devices connected to the Xiaomi IoT platform increased to 3.5 million, a year-on-year increase of 78.7%.
But this is far from enough. 3.5 million people cannot afford Xiaomi’s “Super Internet” market. Although IoT revenues are high, they are not comprehensive