Is The Fate Of Xiaomi Smartphone Leading It To It’s Ultimate Demise ?

Xiaomi's market has been sporadically declining, but what can be the reason for the seemingly fall of such a loved brand.

Rithika Biswas
Rithika Biswas April 4, 2023
Updated 2023/04/06 at 5:53 PM

The company’s difficulty is that its smartphone revenues are not performing as well as projected. This is due to people increasingly preferring other brands over Xiaomi. According to a prediction from research firm Counterpoint, smartphone sales in China will decline in 2022. With a drop of 22.8% in Q4 2022, this drop particularly affected Xiaomi devices hard. Lei Jun confessed in a Financial Times report that the company’s revenues had plummeted and that he was dissatisfied. Initially, the CEO blamed the sales decline on COVID-19. Users, on the other hand, are gradually shifting to Samsung.

For many years, Xiaomi has been the top brand in the Indian market. However, the Beijing firm has lost the Indian market to Samsung, which now reigns supreme. Xiaomi’s competitive advantage in India has always been its lower prices, but things are changing quickly. According to one researcher, this could be attributed to individuals upgrading to more expensive devices. It also stated that the majority of those who buy cheaper phones do so due to financial constraints. They would want to buy more expensive smartphones once they got a decent-paying job. 

However, as Beijing-based Xiaomi enters its ninth year in the country with 200 million smartphones shipped, its first-mover advantages are eroding: it lost the top spot in smartphone shipments in Q4 2022; it faces regulatory scrutiny in the country amid rising economic tensions between China and India; and it has scaled back some of its newer business ventures. 

Xiaomi 12S could be the company's first co-developed smartphone with Leica  - Times of India

Furthermore, Xiaomi is experiencing an exodus of executives in India. According to Counterpoint Research data from January, Xiaomi’s India smartphone shipments in 2022 fell 24% year on year. It managed to maintain its overall lead in 2022, but the outlook for 2023 is bleak: Xiaomi fell to third place in the fourth quarter, trailing Samsung and Chinese challenger Vivo.

Canalys reported a comparable dip, as well as a 40% drop in Xiaomi’s yearly growth in Q4. According to the analytical firm, the company’s yearly growth would plummet by 26% in full-year 2022. IDC also reported a 38%+ drop in the company’s growth in Q4, despite the fact that the smartphone maker retained its market lead. The collapse of Xiaomi in India is not an isolated occurrence. Other major smartphone companies, excluding Samsung and Oppo, have seen a dip in shipments in recent quarters. 

According to market observers, this trend is mostly due to low demand for entry-level cell phones, as well as broader macroeconomic issues such as high inflation and rising unemployment rates. The global smartphone industry has also been slowing. Xiaomi might reclaim its market share in India if it investigates the root cause of the loss. For example, they may enhance the functionality of their flagship and midrange smartphones while also lowering their prices. Who wouldn’t want to get the highest quality at the best price? The majority of folks will.

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