BEIJING, May 19 (TMTPOST)— Xiaomi Corp. is contending with challenges more severe than the Wall Street expected as the Chinese smartphone giant recorded its largest revenue decline and the double-digit shipment drop in the first quarter of the year, lagged behind its peers.

Source: Visual China

Xiaomi posted revenue of RMB73.35 billion (US$10.9 billion) in the quarter, down 4.6% year-over-year (YoY), beating the analyst forecast consensus of RMB72.5 billion, and logged RMB2.859 billion in the adjusted net income on non-IFRS measure with a 52.9% YoY decline, decreasing 36.1% from the previous quarter.

Sales of smartphone, Xiaomi’s key business account for 62.4% of the total quarterly revenue, fell 11.1% YoY to RMB45.76 billion, missing the analyst expectation of RMB46.49 billion. The company shipped 38.5 million smartphones that quarter, dropping 22.1% from a year earlier, though the average selling price (ASP) rose to RMB1,189, representing a 14.1% YoY increase .  

The shortage of lower-end chips in the first quarter was a challenge to the shipment, Xiaomi executives noted in an earnings call on Thursday. “The Covid pandemic in China heavily impacted our operation and logistics. It also hurt consumers’ willingness to buy phones, and the logistics issues also hurt our global shipments,” the president Wang Xiang also took blame for the Covid outbreaks. The supply chain would have noticeable improvements and the company is set to monitor the situation, since it remained uncertain about whether effects on the performance by external factors in the past quarter would alleviate or not in the current quarter, Wang said.

Global smartphone market revenue surpassed $110 billion in the first quarter, declining 2% YoY from the peak revenue notched in the same period of 2021, Counterpoint Research released later that day. Apple’s iPhone revenue shattered a first-quarter record to more than US$50 billion, up 5% YoY, despite a marginal annual shipment decline, and Samsung’s smartphone revenue increased 4% YoY to nearly US$21 billion despite a 6% YoY shipment decline, according to the market research company. Its statistics showed the revenue of Honor, the brand spun off in 2020, grew 188% YoY that quarter, the fastest among the top 10 smartphone OEMs. Counterpoint said that global smartphone ASP increased 9% YoY, driven by the iPhone 13 series, and Xiaomi Chinese brands’ moving up the price tiers to improve their profit margin is another critical factor.