Through the cold winter, millet achieved another growth in six quarters

On November 20, 2023, Xiaomi announced its third quarter financial report. The president of Xiaomi, Lu Weibing, who had just completed his inspection in Latin America, flew to Hong Kong and hosted the third quarter performance briefing of Xiaomi.

Lu Weibing made a summary at the end of the meeting: today's Xiaomi is the best, the ready and the foreseeable future.

In the first half of 2023, the financial report has been in a depressed state, but Xiaomi Q3 has achieved the first quarterly revenue growth in six quarters on a year-on-year basis, and has continued its impressive profit performance. The total revenue of Xiaomi Group reached 70.9 billion yuan, and the adjusted net profit reached 6 billion yuan.

What did Xiaomi do right when the whole consumer electronics market was shrinking?

one Xiaomi's Q3 financial report in the 23rd year: the first growth in six quarters

First, on the business level, Xiaomi Global Intelligence mobile phone The shipment volume Q3 increased by 27% month on month, breaking through 40 million units for the first time in a single quarter of this year, and also ranked among the top three in the world for 13 consecutive quarters. Among the top three smartphone manufacturers in the world, only Xiaomi has achieved positive growth; In addition, the number of monthly active users of the company's global Internet also reached a record high, with a year-on-year growth of 10.5% to 623 million.

Secondly, in terms of performance, Xiaomi Company's advertising revenue increased by 15.7% year on year, reaching 5.4 billion yuan, a record high; Among them, the revenue from overseas Internet services rose 5.8 percentage points year on year, also hitting a record high.

In terms of profitability, the gross profit rate of the company also reached a historical high, increasing by 6.1 percentage points to 22.7% year on year. Among them, the gross profit rate of smart phone business was 16.6%, increasing by 7.7 percentage points year on year, and the gross profit rate of IoT and consumer products business was 17.8%, increasing by 4.3 percentage points year on year, both hitting a historical high.

In terms of finance, the adjusted net profit of the company reached 6 billion yuan, an increase of 183% year on year, and the adjusted net interest rate reached 8.4%, also hitting a record high. Among them, the core business profit reached 7.7 billion yuan, also a record high.

In terms of inventory, in the third quarter of 2023, the company's overall inventory amount was 36.8 billion yuan, down 30.5% year on year, the lowest level since the eleventh quarter; The operating cash flow was also much higher than that of the same period last year, reaching 33.5 billion yuan; As of September 30, 2023, millet's cash reserves reached 127.6 billion yuan, both a record high.

You know, from the perspective of the overall environment, the performance of the global smartphone market in the third quarter is still sluggish, while Xiaomi has achieved positive month on month growth in all regions of the world, especially in Europe, Latin America, and Africa, becoming the only manufacturer among the top three in the global market share to grow against the trend.

In recent years, with the improvement of Xiaomi's product strength and brand strength, drive Xiaomi's internationalization strategy has been steadily promoted,. In the third quarter of 2023, the market share of Xiaomi smart phones in Europe will reach 23.3%, 2.1 percentage points higher than that in the previous month. The market share of smart phones in Latin America will grow 1.8% month on month, 18.3%. The market share of smart phones in Africa will reach 10.7%, 4.7 percentage points higher than that in the previous year. The market share of smart phones in the Middle East will also grow to 17.7%.

According to Canalys data, in the third quarter of this year, Xiaomi ranked the top three in terms of smartphone shipments in 55 countries and regions, and the top five in terms of smartphone shipments in 65 countries and regions.

Another important point in the financial report is the huge growth of Xiaomi offline. In the early days, China's overall mobile phone market accounted for 70% offline, while Xiaomi's offline shipments accounted for only 5% of Xiaomi's total.

In 2021, Xiaomi began to develop its offline channels. On January 9, 2021, thousands of stores of Xiaomi Home opened at the same time nationwide, and the number of Xiaomi Home exceeded 2000. On April 1, 2021, Xiaomi Home opened its 5000th flagship store in Shenyang. By the beginning of November, Lu Weibing announced that the number of Xiaomi Family had exceeded 10000.

However, due to the rapid decline of mobile phone market sales, Xiaomi has chosen the strategy of shrinking, and steadily promoted the operation strategy of the new retail "store integration year" in 2023. So far, the number of offline stores of millet has remained around 10000, expanding cautiously.

In the third quarter of 2023, the monthly average single store payment amount "GMV" of Xiaomizhijia offline stores increased by more than 28% year on year, realizing the efficiency improvement of new retail business. According to third-party data, in the third quarter of 2023, Xiaomi's high-end smartphone sales in mainland China will come from offline channels, contributing more than 55%.

In addition, in terms of inventory, Xiaomi's overall inventory amount was 36.8 billion yuan, down 30.5% year on year, the lowest level in 11 quarters. On the whole, after six consecutive quarters of year-on-year decline in revenue, Xiaomi is rebounding from the bottom and returning to the growth track.

In addition to the growth of mobile phone business, Xiaomi TV ranked first in the shipment volume of mainland China in the third quarter. The shipment volume of Xiaomi refrigerator products increased by more than 95% year on year. According to Canalys data, the shipment volume of Xiaomi's global tablet products in the third quarter increased by 120% year on year.

By the end of September this year, the number of connected IoT devices (excluding smart phones, tablets and laptops) on Xiaomi AIoT platform had reached 699 million, an increase of about 25% year on year. Up to now, Xiaomi IoT has achieved more than 95% coverage of life scenes, with more than 9000 ecological partners.

To sum up, the market performance in the third quarter of 2023, in the words of Lu Weibing, represents the growth of Xiaomi's own ability. Since its establishment 13 years ago, Xiaomi has achieved its business strategy goal of focusing on both scale and profit in 2023.

two Three years of steady progress, driving up the share of Xiaomi's high-end market

Millet 10 At the series of press conferences, Lei Jun formally put forward Xiaomi's new goal: to enter the high-end market. High end impact has always been the top priority of Xiaomi's strategy, but its performance has not been smooth. The price market of more than 4000 yuan is blank for Xiaomi.

In 2021, the premium version of Xiaomi TV Master will be reduced from 49999 yuan to 19999 yuan. The price of Xiaomi MIX4 released in August will be reduced by 1000 yuan, and the price of Xiaomi MIXOLD will be reduced by 3100 yuan. Lei Jun revealed in Xiaomi's annual speech in 2023 Xiaomi 11 and Xiaomi 12 The loss was disastrous. The price reduction will do great harm to the high-end brand.

After three years of exploration and precipitation, Xiaomi finally has his own rhythm.

Xiaomi released continuously Xiaomi 12S Ultra、 Xiaomi MIXFold 2 Xiaomi 13 Xiaomi 13 Pro, Xiaomi 13 Ultra and Xiaomi MIXFold 3 models have gained a lot of reputation in the high-end flagship experience. Since their release, Xiaomi 13 series has ranked second among domestic models of more than 3500 yuan due to its excellent performance and design.

In Q4, Xiaomi continued to advance with great success, and finally saw the hope of the high-end line of Xiaomi, which has been paving the way for three years. Relying on the good reputation saved by Xiaomi 13, Xiaomi 14 The omni channel sales volume of the series reached 1447400 units in 10 days after its launch, which was even more dazzling than the controversial "first sales exceeding one million", which was enough to show that the hot sales performance of Xiaomi 14 was far higher than the general expectation of the market.

In fact, thanks to the hot sales of Xiaomi 14, the market share of Xiaomi sales in W44 week reached 21.9%, becoming the first Android player in the Chinese market; Xiaomi was also the only Chinese smartphone company that achieved positive month on month growth that week, surpassing Apple's month on month growth.

In addition, the sales volume of Xiaomi 14Pro with an average price of 5500 yuan is also very impressive. It took only one and a half months to reach the review volume of Xiaomi Mall in the whole life cycle of Xiaomi 13Pro. The first sales of RedmiK70 series reached 600000 units, and the first sales lasted 14 days. The sales exceeded 1 million units, breaking the K series record.

In Q4, Xiaomi finally reached the second place in China with the number of activated units reaching 11.8021 million, a year-on-year increase of 38.4%, and returned to the first place in China.

three High end: practice muscles, bones and skin externally, and practice one breath internally

The author personally believes that Xiaomi can succeed in two successive generations of product segments at the price of 4000 yuan, and does not repeat the "pay the bill, not buy the double" Xiaomi mantra. The core reason is that Xiaomi has accumulated technology (breath) and brand building (muscle and skin) over the years.

For example, there are several major technological breakthroughs in Xiaomi 14Pro, including the screen shape of full depth micro curved screen, Longjing glass, the stepless variable aperture supporting thousand level adjustment, and titanium metal used in domestic models for the first time.

From the beginning of the RedmiK50 series, Xiaomi has provided 2K screens that are not available at the same price. The K60 and K70 have been replaced with domestic screens. The screens used in the RedmiK60 are produced by Huaxing's 6th generation AMOLED production line, which is also the first 6th generation AMOLED production line in China. This screen is also the first 2K screen in mass production and large-scale commercial use in China. In addition, Xiaomi has made IP68 dustproof and waterproof in the 2000 price RedmiNote13 Pro+.

These reflect the deep cooperation between Xiaomi and the upstream and downstream supply chains. After years of technology accumulation, Xiaomi can make super flagship configurations at the same price.

In addition to visible products, Xiaomi has also made plans for some chips.

After the release of the familiar surging S1 in 2017, Xiaomi was silent on chip development for a period of time. Lei Jun also said: chip, near death. The volume of millet in early years may not support the continuous failure of chip development.

No matter how Xiaomi defines its product ecosystem, the mobile phone business is still the core. For Xiaomi, the growth of mobile phone sales is bound to drive the growth of other ecological products. It is the entrance to Xiaomi's Internet traffic and an uncompromising strategy.

Since then, Xiaomi has turned to smaller chips with lower cost and risk. At present, Xiaomi's ISP chips are surging C series, electric chips are surging P series, and battery management chips are surging G series. In addition, Xiaomi's IoT products in the ecological chain also carry relevant chips developed by Xiaomi.

In 2021, Shanghai Xuanjie Technology Co., Ltd. was established with a registered capital of 1.5 billion yuan. Its legal representative is Zeng Xuezhong, a senior manager of Xiaomi, and its supervisor is Liu De, one of the founders of Xiaomi. Its business scope covers the entire electronic technology field. In November 2023, Beijing Xuanjie Technology Co., Ltd. was established with a registered capital of 3 billion yuan. Xiaomi began to speed up chip manufacturing.

In addition, in the past 13 years, Xiaomi has laid out 12 fields and 99 sub tracks, formed a "fusion technology stack" based on the principle of "deep integration of software and hardware, and comprehensive AI empowerment", and built a technology ecology that constantly empowers product research and development and manufacturing.

There is an old saying that wine is not afraid of deep alley. To be high-end, products and technology are of course the top priority. Good products will spread by themselves. Xiaomi, who started off on the Internet, naturally got through the dividend of the Internet. But the positive spread is fast, and the negative spread is also fast. "Liquor fragrance" may also be covered by the atmosphere of the Internet.

Xiaomi realized this problem and began to reshape its brand.

In 2019, the brands of Xiaomi and Redmi were split, and Redmi, upgraded from Hongmi, became an independent brand, taking over the label of extreme cost performance Mi phones It is positioned to pursue the ultimate technology and experience. Limit the name of the ecological chain company X Mi to avoid diluting the brand value of Xiaomi.

In May 2022, Xiaomi and Leica reached an image strategic cooperation. Leica's technology, brand, tone and aesthetics are regarded as the top benchmark in the image world.

In recent years, Xiaomi has also co branded with many brands of IP, including Mercedes, Lamborghini and Harry Potter, Xiaomi CIVI Jointly named Disney Classic IP, and Xiaomi began to launch offline advertising gradually.

At the beginning of the New Year's Day in 2024, Xiaomi will become a strategic partner of the China Central Radio and Television (CCTV), and its relevant content will be logged on to CCTV.

Internally practice one breath, externally practice muscles, bones and skin. On the high-end route, Xiaomi has chosen to apply both hard and soft measures. We should not only strengthen our own strength, but also do a good job in publicity and brand building.

”The ultimate advantage of the technology industry needs to be reflected in technology and the experience supported by technology, and high-end products are the concentrated embodiment of the company's systematic ability. If we can't continue to force our ability to improve based on the high-end market performance, then in the long run, this company will inevitably move towards mediocrity and even decline. Therefore, high-end is the battle of life and death that Xiaomi cannot avoid. "—— Lei Jun's "Xiaomi Entrepreneurship Thinking"

four Xiaomi Layout New Energy Vehicles: People, Vehicles and Home Ecological Closed Loop

In 2021, Lei Jun announced to build a car, which was not expected by the market. It is quarterly dangerous to work hard for three years to make an entity investment with great difficulty. Domestic new energy vehicles are highly competitive, and the product technology iteration is rapid. Xiaomi has built its own factory with its own funds, and has to catch up with the first-class level of the same price in mass production. For Xiaomi, a cross-border newcomer, the success rate is very low.

Then why did Xiaomi build a car?

Xiaomi's car building is not a temporary intention. As early as October 2014, Shunwei Capital, established by Xiaomi Group and Lei Jun Navigation map , laser radar, intelligent cockpit hardware, automatic driving, three electric systems, Internet of Vehicles and other automotive fields.

Lei Jun is also one of the major investors of Xiaopeng, a new force of domestic trams.

On January 15, 2021, the board of directors of Xiaomi proposed for the first time that the senior management team study the intelligent electric vehicle industry. On March 30 of the same year, Xiaomi Group announced its entry into the smart electric vehicle industry, with an initial investment of 10 billion yuan.

In 2022, Beijing will continue to implement the "Three 100" municipal key projects, with a total investment of about 1.2 trillion yuan. It plans to complete an investment of 280.2 billion yuan this year. Among them, in the column of advanced manufacturing industry, the Xiaomi automobile project ranks first in new projects, which means that construction will be accelerated.

The signing ceremony between Beijing Economic and Technological Development Zone Management Committee and Xiaomi Science and Technology was held, and the two sides signed the Cooperation Agreement, officially announcing the settlement of Xiaomi cars in Beijing Economic and Technological Development Zone.

Xiaomi Automobile Project will build Xiaomi Automobile headquarters base, sales headquarters and R&D headquarters. It will build a complete vehicle factory with an annual output of 300000 vehicles in two phases, of which the capacity of Phase I and Phase II is 150000 vehicles respectively. It is expected that the first vehicle will be offline and mass produced in 2024.

On November 15, 2023, the Ministry of Industry and Information Technology issued the Announcement of Road Motor Vehicle Manufacturers and Products (the 377th batch), in which Xiaomi was also included, which means that Xiaomi is not far away from obtaining the production qualification.

On December 28, 2023, Xiaomi held a technical conference to introduce the five core technologies of Xiaomi cars: electric drive, battery, large die casting, intelligent cockpit and intelligent driving.

Motor: Xiaomi, Liandian and Huichuan jointly developed the Xiaomi super motor V6 and V6s, and independently researched the Xiaomi super motor V8s that refresh the ceiling of the industry, as well as the future oriented laser rotor winding technology, reaching 35000rpm.

Battery: At the beginning of design, Xiaomi's battery system tried to achieve accurate risk prediction and timely protection for users in three aspects of structural safety, electrical safety and thermal safety through in-depth self research of software and hardware.

Large die casting: "industrial giant" Xiaomi super large die casting, the clamping force under normal operation can be up to 9500t, and the rated clamping force is 9100t. Xiaomi cooperates with Haitian in customizing and developing large die-casting machines, self-developed the entire stack of super large die-casting clusters, and self-developed Xiaomi Titan alloy. It is the only automobile manufacturer in the world and the only one in China that has both large die-casting clusters and mass production of large die-casting alloy materials.

Intelligent driving: Xiaomi self-developed intelligent driving, aiming to be the first camp in 2024 industry. Adaptive zoom BEV technology, sensing range can be dynamically adjusted; The "super resolution" occupies the network technology, and the recognition accuracy is less than 0.1m; The large model of Xiaomi Road can realize the function of national urban navigation.

Smart cockpit: "The whole ecology of people, cars and homes" is officially closed. The five features of Xiaomi's surging OS, namely, "bottom reconstruction, cross end smart networking, active intelligence, global security, and open ecology", will all be realized on Xiaomi cars.

As a key part of new energy vehicles, Xiaomi has made in-depth self research. Although it is a cross-border newcomer, Xiaomi has invested heavily. All configurations of SU7 have almost reached the top level. In addition to the technology, talents and ecology accumulated by Xiaomi for more than ten years, Xiaomi has great hope to replicate the glory of the first generation of Xiaomi mobile phones.

More importantly, after 13 years of accumulation, the number of monthly live users of Xiaomi's global Internet has reached 623 million. You can find any home appliances used at home in Xiaomi Mall, and Xiaomi cars are the last part of Xiaomi's ecosystem.

Xiaomi's official statement is: "After entering the new decade, after three years of learning, growth and accumulation, Xiaomi has ushered in a moment of leapfrog development. More importantly, the strategy of Xiaomi Group has been comprehensively upgraded:" people, cars and homes are all ecological ", and cars have become the most important part of Xiaomi's strategy. The automotive industry has developed for a hundred years, and the mechanical quality of cars has reached a very high level. Porsche is the best benchmark. Since the new century, Tesla has taken the lead in creating mobile intelligent terminals; Now, Xiaomi believes that building an advanced mobile intelligent space is the core proposition of the automotive industry in the new century. "

When Xiaomi entered the market, it did not focus on hardware, but on MIUI. Xiaomi proposed "Allin IoT" in 2018, revised it to "Mobile+AIoT" in 2019, revised it to "Mobile xAIoT" again in 2020, and now it is the whole ecology of people and cars.

According to the data released by Xiaomi, Xiaomi cars will be integrated into Mijia APP and become another room for users. Mijia devices that support Changkuan or BLE connection protocols under the same account of the car owner support senseless boarding. As long as the Mijia device is the same as the owner's account, it can be automatically found, accessed without password, and used directly in the car, and can be easily controlled on the central control screen.

In addition, Xiaomi Automobile has supported a wealth of application expansion. Xiaomi is equipped with a unified standardized interface, the richest communication standard protocol, and a lightweight transformation scheme for stock equipment. For example, the smart safety seat launched by Xiaomi in cooperation with a third party can display the status of the seat belt on the central control screen after being connected to the rear interface. If the car is not fastened tightly, an alarm will be sent to remind you, and the baby's status can be observed through the rear PAD camera.

Xiaomi Auto has become another home, has enough ecological connectivity, and even supports Apple CarPlay. It is very promising to become Xiaomi's second growth curve.

five Xiaomi surging OS: public base of Xiaomi ecology

Xiaomi has been doing the interconnection of everything centered on MIUI. In 2010, Xiaomi released MIUI; In 2017, Xiaomi released its own VelaOS to gradually unify the IoT equipment ecology; In 2019, Xiaomi began to research and develop the pure self-developed general system MinaOS in parallel; In 2021, Xiaomi started the research and development of car machine OS. In 2022, Xiaomi decided to integrate MIUI, Vela, Mina and car engine OS Software The architecture is unified. This is the birth process of Xiaomi Pengpai OS, which "completely rewrites the underlying architecture and makes a public base for the interconnection of everything for the future 10 billion devices and 10 billion connections".

In the past, each device had its own set of software stack. Even though it tried to be consistent in the upper layer interaction, it was difficult to perceive consistency in the subtle experience of dynamic effects between devices. Especially at the cross end level, it is difficult to achieve effective interconnection between devices. For example, mobile phones cannot cross end call the camera, speaker and other hardware capabilities of car phones.

In addition, in order to break this limitation, Xiaomi has developed the advanced "Xiaomi HyperConnect", which enables the devices to connect efficiently and cooperate perfectly. The integrated device center makes all connected devices become a whole. Software and services can select the most suitable hardware among all devices according to the demand.

At present, Xiaomi has more than 5000 employees in charge of Xiaomi's surging OS, and together with Xiaomi Die Casting, it has won a million dollar technology award.

The core reason for its award is the excellent cross terminal capability of Xiaomi Pengpai OS, which is also the biggest difference between Xiaomi Pengpai OS and other operating systems.

six In the new decade, Xiaomi has completed its ecological map

"In the new decade, Xiaomi has come to a critical moment. Next, you will see more and more concentrated emergence of Xiaomi's leading technologies, and a new Xiaomi will appear in front of you from now on." This is a paragraph written by Lei Jun on social media.

Looking back on the development of Xiaomi, like its stock, it has experienced ups and downs. From the online public opinion and the actual feedback from the capital market, everyone's attitude is basically wait-and-see and questioning.

Lei Jun always emphasizes the tuyere, and follows the trend. It seems that many decisions are made passively, but Lei Jun and the whole team are very ahead of the game. They know very well where tuyere can help Xiaomi go.

The grocery store has become the world's largest IoT ecosystem, and MIUI has grown into a surging OS connecting people and cars.

So, what will Xiaomi look like in the next decade?

Lei Jun mentioned the concept of Xiaomi technology ecology earlier: starting from smart phones, to wearable devices, smart homes, to smart manufacturing, smart electric vehicles and bionic robots, focusing on people's life and work, better serve people, and closely connect people and everything.

At the third quarter financial report conference, centering on Xiaomi's strategic layout, Lu Weibing further summarized that: Xiaomi currently has several very important strategies, one is to invest in the underlying core technologies, the other is to unswervingly pursue high-end development, and the third is to unswervingly pursue internationalization.

Cooperate with industry partners, from industry developers, supply chain to intelligent manufacturing, and lay out the "industrial ecology" in the whole link. We are committed to pooling the potential energy of the whole industry, so as to make Xiaomi Pengpai OS a more open operating system. Finally, they are integrated into one of the largest strategies, namely, the strategy of "people, cars, and homes are all ecological".

In 2024, Xiaomi Automobile will come into the market, and its hardware equipment will be supplemented. The unification of the underlying system will enable more efficient cross end interconnection between devices. Xiaomi will be the first company to achieve full scene ecological interconnection. "Let everyone enjoy the fun of technology" will really enter the life of thousands of families.

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