Xiaomi Corp of China reported a lower-than-expected 8.2 per cent increase in its third-quarter revenue, citing stagnation in smartphone sales in the face of increased competition from rivals.

The weak quarterly results of the company dropped by 7 per cent.

The company reported that there was a 0.4 per cent growth in its revenues from its smartphone business to 47.8 billion yuan ($7.49 billion) in the three months to September 30, according to the firm, which makes the vast bulk of its money selling mobile devices.

However, there was a 5.8 per cent decline in smartphone shipments compared to the same period a year ago, to 43.9 million devices in the third quarter. This drop in shipments, according to the firm, was due to the global semiconductor scarcity.

Xiaomi president Xiang Wang stated at an earnings conference that the business is “working hard” to get supply from suppliers from countries apart from those that it currently imports for its 4G handsets.

He also predicted that the shortfall in the semiconductor chips would last through the first part of next year, but also added that the company will “continue extremely rapid growth” in 2022.

In the July-September quarter, sales of the company grew to 78.06 billion yuan overall but fell short of Refinitiv’s forecast of 79.20 billion yuan.

Xiaomi, which gained market share in China following the withdrawal of sanctions-hit competitor Huawei Technologies Co Ltd, has recently lost ground to top-selling Oppo and Vivo, as well as Huawei offshoot Honor.

According to Canalys, Honor surpassed Xiaomi to take third place in China’s smartphone market share in the July-September quarter.

There was only a 4 per cent year on year growth in the country’s shipments in China over the quarter, according to Canalys.

The country’s overall smartphone sales dropped 5 per cent year on year.

Xiaomi has aggressively pushed into brick-and-mortar retail in response to the competition. The firm inaugurated its 10,000th shop in China this month, with plans to triple that number in the next two to three years. The business, which said in March that it will invest $10 billion in the electric vehicle (EV) sector, said on Tuesday that mass manufacturing of EVs would begin in the first half of 2024.

Xiaomi also generates money by selling web advertisements and other consumer electronics.

The company’s internet services unit, which generates money mostly by distributing advertisements across numerous apps, grew by 27% year over year.

Xiaomi made a profit of 5.18 billion yuan after one-time gains and losses, which was much in line with expert projections of 5.09 billion yuan.

(Adapted from BusinessIndia.in)