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Falling smartphone sales not an issue for Xiaomi

By Cookie Monster - on 27 Nov 2016, 1:00am

Falling smartphone sales not an issue for Xiaomi

Just half a year ago, Xiaomi was the best selling phone brand in China with 26% market share. Today, research firm IDC estimated that its Q3 2016 sales dropped 45% which casted doubts on whether Xiaomi can maintain its momentum. Well, a senior executive seems to be optimistic about the company's future.

In an interview with Reuters, Xiaomi's global VP Hugo Barra revealed that falling smartphone sales will not have a huge impact on the company. Elaborating further, Barra said that Xiaomi's business model is not based on profits made from phone sales.

"Basically we're giving [handsets] to you without making any money… we care about the recurring revenue streams over many years," he told Reuters in an interview. 

"We could sell 10 billion smartphones and we wouldn't make a single dime in profits," he added.

In fact, profit growth is generated from sales of its smart home devices and revenue from its software ecosystem. Currently, Xiaomi sells a wide range of smart home devices such as air purifiers, water purifiers, robot vacuum cleaners and rice cookers

Xiaomi is also expanding into more markets, especially the U.S where it is said to be releasing a device capable of roaming on the 4G networks. The target market is Chinese users traveling in the U.S, but it sets the groundwork for future direct sales to U.S customers. It will be making its first appearance at Consumer Electronics Show (CES) 2017 where it will be launching an "all-new product globally".

Source: Reuters 

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