Xiaomi could sell 10 billion smartphones and not make a profit : Hugo Barra

Xiaomi is rapidly losing in smartphone sales and it seems like a cause for concern for the fans and industry watchers but the company is no more a startup, and apparently the declining sales won’t affect them according to Xiaomi global vp Hugo Barra.

Barra says, “We could sell 10 billion smartphones and we wouldn’t make a single dime in profits. Basically we’re giving them to you without making any money… we care about the recurring revenue streams over many years.” 

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There aren’t many companies that can say declining smartphone sales don’t affect them, but then, they don’t rely on a software ecosystem and revenues from that either. With it’s MIUI Xiaomi has not only created another skinned version of Android but an ecosystem of connected apps and services. Smartphone sales are, of course, important to the company, but they are not a financial imperative as with most companies.

Valued at no more than $46 billion upon receiving $1.1B funding at the end of 2014, the Chinese designer and developer of laptops, wearables and various smart home products feels “no pressing need to do an IPO or even a private round.”

That’s precisely due to the success of lucrative devices like air and water purifiers, intelligent rice cookers, scales or vacuums, as well as “recurring” software revenue.

Xiaomi is also not relying only on smartphones, Xiaomi’s vp Liu De said in April that the company expected sales of smart home devices to double to 10 billion yuan (~$1.5 billion) this year.

Huawei’s rise in China has probably affected Xiaomi the most. The company has invested heavily in India and Southeast Asia and is making its first forays into the U.S. market – launching next month its first device capable of roaming on the country’s 4G networks. What do you think about Xiaomi smartphones? Have you used one?

Source :  Reuters

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