Xiaomi "bottom" again

Author | Tang Fei

The mobile phone industry is crossing the long winter.

Since last year, the rapid decline in sales of mobile phone products and the weakening of consumer confidence have made the entire industry as cold winter. According to IDC data, the global smartphone shipments in the second quarter of 2022 were 290 million units, a year -on -year decrease of 8.7%.

It is difficult for Xiaomi Group to be alone in it. In addition, it has to "burn money" with a large number of cars. Xiaomi can only be described in one word in the first half of the year -difficulty.

Moreover, Geely and Weilai and other car companies seem to have a strong interest in making mobile phones. Mobile phone manufacturers and car companies have penetrated each other's hinterland, so that the mobile phone market that was originally unable to calm down has resurrected.

Profitable

A few days ago, Xiaomi Group announced the three -month and six months of unique comprehensive results for the three and six months ended June 30, 2022.

The financial report shows that Xiaomi Group's second quarter revenue was 70.17 billion yuan, a year -on -year decrease of 20.1%; the net profit of 2.1 billion yuan was adjusted in the second quarter, a year -on -year decrease of 67%.

In the first half of the year, Xiaomi Group's revenue was 143.5 billion yuan, a year -on -year decrease of 12.84%, and net profit was 798.8 million yuan, a year -on -year decrease of 95.02%.

For this "double drop" transcript, Xiaomi Group explained in the financial report that it was mainly due to the reduction of smartphone shipments. In the second quarter, Xiaomi smartphone shipments decreased from 52.9 million units in the same period in 2021 to 39.1 million units, a year -on -year decrease of 26.2%.

The report released by IDC also verified Xiaomi's claim from the side. According to IDC data, the global smartphone shipments in the second quarter of 2022 were 290 million units, of which Xiaomi share was 13.8%, a year -on -year decrease of 3.1 percentage points; mainland China ’s smartphone shipments in the second quarter, 67.2 million units, of which Xiaomi shipped about 1050 10,000 units, accounting for 15.6%,

The reduction in shipments directly led to the decline in Xiaomi's income. In the second quarter, Xiaomi's smartphone revenue decreased from 59.1 billion yuan in the same period last year to 28.5%to 42.3 billion yuan.

Moreover, the ASP (the average price of smartphones) of Xiaomi mobile phones is also declining. The average price per unit in the second quarter of 2021 was 1116.7 yuan. By the second quarter of this year, the number dropped to 1081.7 yuan per mobile phone.

With the decline of ASP, the gross profit margin of Xiaomi smartphones also decreased from 11.8%in the second quarter of last year to 8.7%this year, a significant decline of 3 percentage points.

On the whole, Xiaomi Group's mobile phone business was fully pressed.

On the one hand, income is decreasing, and on the other hand, Xiaomi's flowers are getting bigger and bigger. In the second quarter, Xiaomi's R & D expenditure was 3.8 billion yuan, an increase of 22.8%compared to the 3.1 billion yuan in the same period last year, mainly due to the increase in R & D expenses related to innovative businesses such as smart electric vehicles.

In addition, the financial report also revealed that in the field of autonomous driving, Xiaomi has established more than 500 R & D elite teams, and has formulated a technical layout strategy for the full -scale self -research algorithm. In the first phase of the first phase of the self -driving field, the investment in research and development was 3.3 billion yuan.

At the annual lecture & new product launch conference in early August, Lei Jun said that since the official announcement of the car, it has been 500 days since the official announcement. The entry point and open the car market.

He also revealed that Xiaomi Automobile supports autonomous driving, and it is 100 % full -stack self -proclaimed algorithm. There are not a few in the entire industry that can do it, because autonomous driving is the key point for smart electric vehicles.

It is foreseeable that as Xiaomi's delivery period is getting closer and closer, Xiaomi will still maintain high investment in the field of smart electric vehicles.

There are a lot of users and not spending much money

In the Xiaomi system, the hardware profit is extremely thin, and users can get users through mobile phone sales, and let them pay for Internet services and peripheral products, becoming Xiaomi's important source of profit.

From the past situation, Xiaomi Guang is difficult to obtain high profits by selling mobile phones, even if it is high -end, because its brand premium is limited. Also obtaining sales revenue of 10,000 yuan, Apple may earn 4,300 yuan, and according to the gross profit of Xiaomi Group in the second quarter of the Xiaomi Group, it may not even earn 2000.

Therefore, the number and quality of users obtained through mobile phones and IoT products are the most concerned sets of data on Xiaomi's profitability.

But what about the result? Since 2019, Xiaomi's MIUI users have begun to fluctuate.

In the second quarter of this year, Xiaomi MIUI monthly living users reached 547 million, a net increase of 17.8 million, but the growth rate was a new low in the past 14 quarters.

What is worse is that these new users do not seem to be willing to spend money. In the second quarter, Xiaomi Internet service ARPU value was 12.7 yuan, a year -on -year decrease of 18%.

According to the business model claimed by Xiaomi, MIUI users can be converted into repurchase crowds, and then spread to mobile phones and IoT products, thereby driving overall revenue growth.

However, from the results, the success rate of these users' "transformation" has decreased year by year. As of the second quarter of this year, the per capita mobile phone and IoT consumption amount of MIUI users was 77.3 yuan and 36.2 yuan. In comparison, the set of data in the same period last year was 111.7 yuan and 45.6 yuan.

Based on this, some media have inferred that the users obtained in the past six months are just the "cost -effectiveness" of simply Bai Xiaomi hardware, and did not join Xiaomi's ecological chain and did not consume. In this way, the global monthly work of more than 500 million MIUI can contribute not greatly.

5G changing waves have not arrived

In fact, the days of domestic mobile phones have not been very good this year.

According to the report of Countpoint Research, China's smartphone sales in the second quarter of 2022 decreased by 14.2%year -on -year. It is less than half of the peak historical sales in the fourth quarter of 2016.

In terms of specific rankings, vivo maintained the first share of 19.8%, followed by Honor (18.3%), OPPO (17.9%), Apple (15.5%), Xiaomi (14.9%), Huawei (6.9%) and Realme (2.4%2.4%) To.

Photo source: Countpoint Research

You know, this is still based on the 618 e -commerce shopping festival in the second quarter. Without this wave of promotions, the performance of various mobile phone brands in the first half of the year may be even more bleak.

According to data from China Xintong Institute, in April 2022, the domestic market's mobile phone shipments were 18.079 million units, a year -on -year decrease of 34.2%. In May 2022, the overall shipments of the domestic mobile phone market shipped 20.805 million units, a year -on -year decrease of 9.4%.

There are two main reasons for the overall decline in shipments. One is that the period of the replacement period is extended, and the other is that the real 5G "changing tide" has not yet arrived.

The data released by the Countpoint Research shows that the current average user replacement cycle of domestic users exceeds 31 months, and another institution Strategy Analytics data shows that the average replacement cycle of Chinese users is 28 months. Earlier this year, Hu Baishan, executive vice president of vivo, publicly stated that the earliest mobile phone replacement cycle was 16-18 months, and later became 20-24 months, and recently reached 36 months.

In this regard, the extension of the replacement cycle is an indisputable fact.

From the perspective of industry insiders, a major reason for the long -term mobile phone replacement cycle is the impact of epidemic and global economic pressure. From the perspective of the production side, data from the Ministry of Industry and Information Technology showed that from January to May, the output of mobile phones was 609 million units, a year-on-year decrease of 1.7%, of which smartphones output was 470 million units, a year-on-year decrease of 0.7%. From the perspective of consumption, in May, the retail sales of communications equipment category above the limit of units were 39.4 billion yuan, a year -on -year decrease of 7.7%.

Check out the domestic mobile phone market in the past two years. It can be found that the essence behind this is that the essence behind this is that 5G failed to drive the needs of the mobile phone market.

Data show that in 2021, the total number of mobile phone users across the country was 1.643 billion, and the annual net increase was 48.75 million, with a penetration rate of 116.3/100 people. Among them, 4G mobile phone users were 1.069 billion, 5G mobile phone users reached 355 million, and the two accounted for 86.7%of the number of mobile phone users (the rest are 3G).

According to this speed, suppose all 5G mobile phone shipments come from 4G users to change the machine, and it takes more than 3 years to completely convert this part of 4G users. In fact, there are far less 5G mobile phone users from 4G migration. The proportion of 4G is greater than 5G, and I am afraid it will continue for a long time.

Picture source: "5G mobile phone report in the second quarter of 2022"

The Daily Interactive "5G Mobile Report in the Second quarter of 2022" shows that from the TOP20 ranking of popular 5G mobile phone markets in the second quarter of 2022, domestic popular 5G mobile phone models are still mainly classic models.

Among them, the iPhone5G series mobile phone performance is the most prominent, occupying the head position; the popularity of Huawei classic 5G models is still unabated. The iPhone13 series, Honor 50, Redmi K40, OPPO RENO6, vivo Y70T market share in 2021 ranked the top 20 in September 2021. Nothing was on the list.

In other words, even if consumers choose to change 5G, they choose the models of the previous generation and even the previous generations. These models generally have experienced price reductions and cannot help companies raise their revenue.

What is worse is that everyone not only does not want to change the machine, but even if the machine does not want to change the mobile phone. According to the data of the Terr terminal laboratory, in 2021, the price range of the highest price of 5G smartphones in my country was moved from 2000-3000 yuan to 1000-2000 yuan, and the price segment of 1000-2000 yuan 5G mobile phone share reached 39.1%. Increasing 22.9%compared to 2020.

There is also a set of data that can also show that consumers are not very interested in 5G. China Mobile's midterm of 2022 shows that the 5G ARPU value of China Mobile in the first half of the year was 85 yuan, a year -on -year decrease of 4.4%.

Therefore, some relevant people said that 5G models, especially high -end 5G models, often become the means for enterprises to show muscles, but whether these models that have been developed at a large price are really easy to sell, whether consumers buy it, it is still worth observing. Essence

There is a saying, "A grain of the times is a mountain falling on everyone." This sentence seems to be placed on the enterprise, and the mobile phone contributes to Xiaomi 60 % of the income. As the global mobile phone market enters the cold winter,Xiaomi also has its own "big mountain".In the past eight months, Xiaomi Group's stock price has fallen from HK $ 19/share at the beginning of the year to HK $ 11.66 per share on August 19, a drop of nearly 40 %.In the past year, it has fallen more than 57%.

Reference materials:

[1] "After watching the sales in the first half of the year, Huawei Xiaomi OV is generally hemp", Zealer

[2] "Xiaomi Group: needs to be restored, Q2 profit or bottom", Guosheng Securities

[3] "Overseas markets become a new engine, mobile phones × AIOT build ecological protection rivers -Xiaomi Group In -depth Report", Zhejiang Shang Securities

*This article is based on public information, which is only used as information exchange, and does not constitute any investment suggestions

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