Xiaomi failed to meet its third quarter sales target in China by an impressive 45-percent; and yet the company believes that everything is going according to plan. Xiaomi’s global vice-president Hugo Barra explained that the company’s business plan does not hinge on smartphone sales; and it doesn’t really matter how many are sold.
Barra said that Xiaomi is practically giving people smartphones without any profit, and that it could easily sell “10 billion smartphones” and “not make a single dime of profit”. This is due to the company caring more about recurring revenue streams instead of hardware sales. Despite this, Barra did not elaborate about what these revenue sources are.
Xiaomi does not disclose its profits and revenue figures, which makes it difficult to understand how the company works. The closest anyone can get is the $46 billion valuation when it was raising funds back in 2014.
Decreasing smartphone sales in China may have something to do with Xiaomi’s global expansion plans taking a surprising turn. The company is set to launch a new device at CES 2017 for the US market, marking its first foray into one of the world’s most valuable economies.