Chinese smartphone maker Xiaomi Corp. announced on Tuesday its first consolidated financial statements since listing in Hong Kong in July, reporting RMB 13.48 billion (around $2 billion) in profit last year, bouncing back from a RMB 43.9 billion loss in 2017.
The Beijing-based company generated revenue of RMB 174.9 billion (around $26 billion) for 2018, representing a year-on-year increase of 52.6%, but missing the RMB 176 billion average estimate from analyst forecasts compiled by Bloomberg.
Xiaomi’s smartphone segment recorded revenue of approximately RMB 113.8 billion ($16.6 billion) in 2018, a 41.3% year-over-year increase, driven by growth in both smartphone sales volume and average selling price. Smartphone shipments saw robust growth, increasing 29.8% year-on-year to 118.7 million units in 2018, a marked difference from the 4.1% year-on-year decline in the global smartphone market, according to figures from International Data Corp (IDC).
Revenue from its IoT and lifestyle products segment surged 86.9% year-on-year to RMB 43.8 billion ($6.5 billion). It shipped 8.4 million smart TVs, representing growth of 225.5% compared with a year earlier. As of the end of 2018, approximately 150.9 million IoT devices (excluding smartphones and laptops) were connected on Xiaomi’s IoT platform, a quarter-over-quarter increase of 14.7% and a year-on-year increase of 193.2%.
While the smartphone segment comprises the lions share of its revenue, Xiaomi aims to be known as an internet company, rather than a hardware manufacturer. It will invest more than RMB 10 billion (around $1.5 billion) into the development of the “artificial intelligence of things,” or AIoT, over the next five years. AIoT refers to embedding AI applications into infrastructure components which are linked by IoT networks, such as an air conditioning unit that adjusts its thermostat based on preferences learned from past use. The company launched its “smartphone + AIoT” dual-engine strategy in January.
“Over the last eight years, our focus was always around smartphones, but this year we have started our smartphones + AIoT as a dual engine,” Xiaomi founder and CEO Lei Jun told analysts on a call Tuesday, according to Nikkei Asian Review. “AIoT is a historic opportunity for us, we can be a pioneer in this very big market segment.”