Xiaomi made only $56 million in profits in 2013

BY Rajesh Pandey

Published 15 Dec 2014


Xiaomi has easily been one of the most popular companies of 2014 in the smartphone market. The company has raced to become the fifth largest smartphone maker in the world, even though it has little to almost no presence outside of a few countries in Asia. 

The company has been consistently compared to Apple, and is considered by many as a threat to the latter. However, even though Xiaomi might just be able to beat Apple in terms of number of smartphones shipped in a quarter or year in the next few years, it still has a long way to go when it comes to earning money from them.

According to the company’s regulatory filing, it managed to earn a profit of only $56 million (347.5 million yuan) in 2013 with an operating margin of only 1.8%. The numbers were confirmed by a Xiaomi spokesperson, but he noted that the filing did not incorporate all of Xiaomi’s business operations. On the other hand, Apple managed to earn a staggering profit of $7.5 billion only in the fourth quarter of 2013 that ended on September 28, 2013. The Cupertino company reported an yearly operating profit margin of 28.7%, which is more than 15x times that of what Xiaomi reported.

Xiaomi has also been a strong threat to Samsung, and has been eating into its low-end market share. The number 1 smartphone vendor in the world reported a profit of $31.96 billion in 2013, with an operating profit of 18.7%.

Xiaomi is known for selling devices that offer extreme value for money. To keep its overhead charges in control, the company sells its devices through e-commerce websites and does not own a single physical store. Additionally, the company employs a flash sale mechanism where it offers a limited quantity of its handset for sale on a particular day of the week. The company aims to generate revenue not by selling hardware, but through the various software services it offers to its customers through its devices.

Xiaomi has expanded its presence greatly outside of China in 2014, with India already becoming its second largest market. It will be interesting to see if the company manages to post a healthy profit in 2014 or not.

[Via Reuters]