Xiaomi has reported its Q1 2023 performance. In this quarter, the company achieved revenue of 8.42 billion USD, and an adjusted net profit of 452.6 million USD, marking a 13% year-on-year increase and a 121% sequential increase.
In a recent earnings call, Xiaomi‘s President Lu Weibing, along with other top executives, addressed various questions and unveiled the company’s latest advancements in chip production, electric vehicles, and AI.
Electric Vehicles: On Track or Slightly Ahead of Schedule
Lu Weibing stated that the development of Xiaomi‘s electric vehicles is progressing smoothly. Initially planned to be launched in the first half of next year, the timeline is either on track or slightly ahead of schedule. This year, Xiaomi‘s cars will continue to undergo winter and summer tests as planned. In the first quarter of 2023, Xiaomi spent approximately 1.1 billion yuan on innovative business expenses, including intelligent electric vehicles.
AI: Not Making General Large Models
Xiaomi‘s work in the AI field, which includes the development of large models, has attracted widespread attention. The company has been cultivating in this field for many years, with teams dedicated to AI labs, Xiaoai classmates, and autonomous driving. Lei Jun, the founder of Xiaomi, stated that the company is dedicated to embracing large models and is currently developing interesting technologies and products.
As of April 2023, Xiaomi officially set up a large model team in the AI lab. The company now has over 1,200 AI personnel involved in various areas such as Xiaoai and autonomous driving. Lu Weibing clarified, “We will not make general large models like OpenAI, that’s a very clear conclusion. Xiaomi will actively embrace AI, deeply integrate it with our own business, and enhance the level of intelligence.
“As of March 31, 2023, the number of IoT devices connected to Xiaomi‘s AIoT platform (excluding smartphones, tablets, and laptops) increased by 29.2% year-on-year to 618 million. The number of users with five or more devices connected to the Xiaomi AIoT platform also increased by 29.6% year-on-year to 12.3 million. Xiaomi aims to continually explore AI-related user scenarios, leverage its technological advantages, and seek more opportunities with its partners in an open attitude.
Chip Manufacturing: Prepared for a Long-Term Battle
Xiaomi is one of the few smartphone manufacturers that independently produce chips. The progress of Xiaomi‘s chip production has always attracted much attention, especially after OPPO shut down Zeku, which has caused the market to worry about the “growth status” of Xiaomi‘s chip business.
Lu Weibing stated that Xiaomi fully recognizes the complexity and long-term nature of chip investment. The company will adhere to the development rules of the chip industry, persistently invest in the long term, and prepare for a protracted battle, with preparations for long-term struggles of 10 to 20 years. Xiaomi‘s self-developed chips currently focus on improving user experience in core areas such as imaging, charging, and battery management. The company has already launched the Surging C1C2 image processing chip, Surging P1 charging chip, and G1 battery management chip. In the future, Xiaomi will continue to conduct research and development around improving user experience, enhancing terminal competitiveness, and improving user experience.
Smartphones: Seeing Initial Success in the High-End Market
The global demand for smartphones in 2023 is under pressure due to factors such as a lack of consumer confidence and weakened purchasing power. However, Xiaomi‘s Q1 performance was noteworthy.
According to a report by TechInsights, the shipment volume of smartphones in China in the first quarter of 2023 reached 62.5 million units, a year-on-year decrease of 13.1% and a sequential decrease of 12.1%. According to data from Canalys, Xiaomi ranked third in global smartphone shipments in the first quarter, reaching 30.4 million units, with a market share of 11.3%. The revenue from the smartphone business reached 4.95 billion USD, with a gross profit margin of 11.2%, a sequential increase of 3.1 percentage points.
In the mid-to-high-end segment, Xiaomi ranked first among Android manufacturers in the mainland China region for smartphone sales in the price range of 4000-5000 yuan in the first quarter, with a year-on-year increase in market share to 24.1%.