Xiaomi hit by slowdown in smartphone market, revenues down 10 percent

Chinese smartphone company Xiaomi’s quarterly revenue fell by around 10 percent. The slowdown in the global smartphone market and declining demand in China have affected the company’s sales. Sales of its mobile devices fell by around 11 percent. The company’s sales during July-September were 70.5 billion yuan (about Rs. 80,900 crore).

Xiaomi’s sales are slightly higher than expected, but the company’s net loss of about 1.5 billion yuan is surprising. Xiaomi has written off about 3 billion yuan in items such as investment losses, and this has led to a net loss in its results. China’s zero covid policy has increased the difficulties of tech companies. So the supply chain has come to a standstill. In addition, rising inflation and slowing economic growth are reducing demand for electronics. However, Xiaomi has managed to increase its market share in Europe.

Company President Wang Xiang said, “Corona is a challenge in China. There is scope for growth in the international market.” Global smartphone sales are expected to decline by 2.9 percent next year. Xiaomi’s unit sales are expected to decline this year. The company’s India unit has been accused of providing false information to its banker Deutsche Bank over the years. The company claimed that there was an agreement to pay royalties, but there was none. The probe against the company found that it had ‘illegally’ remitted money to US chip maker Qualcomm and others under the ‘head’ of royalties. A Deutsche Bank executive told investigators in April that Indian law requires a legal agreement between Xiaomi’s India unit and Qualcomm for royalty payments. The company told Deutsche Bank that it had such an agreement.

The Karnataka High Court had dismissed the company’s appeal against the seizure of assets worth around $676 million. The property has been seized by the Enforcement Directorate (ED). The ED alleged that the company illegally transferred funds abroad to pay royalties.

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