Xiaomi Updates: Q3 2022

Xiaomi Faces Headwinds Globally in Q3 2022

Xiaomi has reported a decline of 9.7% YoY in its Q3 2022 revenue at RMB 70.5 billion (or $9.8 billion). But it stayed largely flat in QoQ terms. The revenue decline was attributed to a slowdown in the company’s three major segments – smartphones, AIoT and internet services.

The smartphone segment suffered the most severe decline among the three, with revenue down 11.1% YoY. Based on Counterpoint’s Market Monitor Service, Xiaomi’s shipments were down 8.8% YoY in Q3 2022 with a global market share of 13.4%. The decline in shipments was also accompanied by a decrease in the average selling price (ASP). Xiaomi’s smartphone ASP declined 2.2% QoQ from RMB 1,081.7 (or $ 151) per unit in Q2 to RMB 1,058.2 per unit (or $148) in Q3 due to promotional activities in overseas markets to clear out inventory, offsetting the increase in ASP in China’s market.

The smartphone market continues to face headwinds both in China and globally. In Xiaomi’s home market, ongoing COVID-19 restrictions on mobility and weak economic environment have led to sluggish smartphone sales throughout 2022, which is expected to register a double-digit YoY decline, according to Counterpoint’s estimates. The frequent lockdowns across the country are impacting Xiaomi’s strategy to grow its offline channels, which is seen as a key weakness of the company when compared to OPPO and vivo. Coupled with fierce competition from local players OPPO, vivo and HONOR, as well as Apple’s latest series, Xiaomi’s market position dropped one rank to reach fifth in Q3 2022.

Commenting on Xiaomi’s overseas smartphone business in Q3 2022, Research Analyst Mengmeng Zhang said, “Overseas shipments accounted for more than 75% of Xiaomi’s total shipments. The sluggish macro environment, inflation and foreign exchange fluctuations have also taken a toll on Xiaomi’s sales in the overseas market. On the bright side, we see that Xiaomi is continuously growing its market share in Europe, Latin America and Middle East.”

Xiaomi’s inventory level in China has normalized after the mid-year ‘618’ shopping festival in Q2. However, to clear its inventory for the global market, the company will have to wait till at least Q4, when festive season promotions are launched.

Xiaomi continues to invest heavily in R&D, with the company’s R&D personnel accounting for 48% of its total employees. Xiaomi’s R&D expenditure also grew 25.7% YoY to RMB 4.1 billion (or $0.57 billion) in Q3. More than RMB 829 million (or $116 million) went to new businesses including EV. Xiaomi’s EV business is still in the early stages of development. It is unclear at the moment whether the company will emerge as a leading player in China’s competitive auto market.

Xiaomi’s IoT and lifestyle products segment saw a 9% YoY decline and 4% QoQ decline in Q3. The slowdown in this segment is largely due to weak consumer sentiment. Commenting on the performance of this segment, Senior Analyst Ivan Lam said, “The IoT and lifestyle products remain an important segment for Xiaomi, accounting for 27% of its revenue during the quarter. Despite the segment’s slowing growth, Xiaomi made strong progress in the smart large appliances, such as air conditioners, refrigerators and washing machines, with revenue growing 70% YoY. Smart large appliances are necessities that can better withstand economic downturns. We expect the innovative features of Xiaomi’s smart large appliances to continue to drive demand, especially among younger customers, and become a larger contributor to the IoT and lifestyle products segment.”

Internet services revenue was also muted, declining 3.7% YoY while growing 1.4% QoQ. The segment was particularly hurt by slower China advertisement demand despite growth in overseas markets. Research Analyst Archie Zhang said, “Although the monthly active users of MIUI have reached record highs both globally and in China, monetizing the traffic is challenging during the difficult macro environment and will likely carry through to 2023.”

Xiaomi Q2 2022 Update

Global Smartphone Market Downturn Impacts Xiaomi Numbers

August 23, 2022

Xiaomi’s latest financial numbers fully demonstrate the impact of the global smartphone market downturn in Q2 2022. The company’s revenue dropped 20.1% YoY to RMB 70.2 billion (or $10.3 billion) during the quarter. Most of this decline came from the company’s smartphone unit, which dropped 28.5% to RMB 42.3 billion ($6.2 billion). According to Counterpoint’s Market Monitor Service, Xiaomi’s shipments were down 25% in Q2 2022 with a market share of 13.4%, the third highest after Apple and Samsung.

Xiaomi’s revenue distribution appeared more diversified in Q2 2022 than it was in the same period last year as the non-smartphone units recorded fewer declines in Q2 2022.

xiaomi revenue distribution

Commenting on Xiaomi’s smartphone business in Q2 2022, Senior Analyst Ivan Lam said, “In Q2, Xiaomi’s smartphone business was squeezed by Samsung overseas and HONOR in home market China. After the mid-year ‘618’ shopping festival, Xiaomi’s inventory situation in China eased and returned to a normal level. However, inventory issues still haunt Xiaomi in other regional markets as global inflation and the looming macroeconomic recession keep customers from purchasing or replacing smartphones. In China, HONOR’s strong momentum also pressured Xiaomi’s smartphone sales in Q2. Xiaomi’s shipment share ranked fourth in China while HONOR took the top spot. Looking forward, we believe the Chinese smartphone market is bottoming out but not before realizing a double-digit decline in 2022. The global market will contract too. Xiaomi is slowing down expansion offline, which will weaken its ability to take on the competition in China. The headwinds faced by Xiaomi’s main business are far from over.”

Xiaomi Shipment chart

Inventory issues faced by smartphone OEMs, including Xiaomi, have been under the spotlight this year. There have been reports of OEMs slashing production orders, canceling component purchases and adjusting shipment targets for 2022. According to Counterpoint’s analysis of Xiaomi’s financial report, the company’s inventory turnover days edged higher in Q2 2022. But as the inventory level in China has been lowered, we think Xiaomi may embark on relatively aggressive sales promotion campaigns in other regional markets.

Xiaomi continues to invest in the long term. The company’s R&D expenditure grew 22.8% YoY to RMB 3.8 billion ($0.56 billion) in Q2. More than RMB 611 million went to new businesses including EV.

Founder and CEO Lei Jun said Xiaomi’s EV would go into mass production in the first half of 2024. This means the company still needs one-and-a-half years to see its new growth engine start running. Commenting on Xiaomi’s EV ambition, Research Analyst Archie Zhang said, “EV is a brand-new business for Xiaomi. Therefore, its smartphone business needs to generate enough profits to sustain the growing ADAS and digital cockpit R&D expenditure. Xiaomi has a great advantage over car OEMs, especially since it knows what tech-savvy customers are looking for. But our research shows EV customers still prioritize safety over other factors such as in-car entertainment. That is why established car OEMs like BYD and Volkswagen still dominate EV sales in China, according to our data. Xiaomi may need a couple of more years to prove that its EVs are stable and secure to win over a considerable market share.”


Xiaomi Q1 2022 Update

Xiaomi’s 4.6% YoY Revenue Decrease in Q1 2022 Signals Turbulence in Smartphone Segment

May 23, 2022

Xiaomi registered a 4.6% YoY and 14.3% QoQ decline in its Q1 2022 revenue, something which was being expected. The result can be mainly attributed to the decline in its smartphone sales globally. The company’s smartphone business, which is its biggest, recorded an 11.1% YoY decline. Xiaomi’s global smartphone shipment share has been declining through the past three quarters, from the highest point of 16% in Q2 2021 to 12% in Q1 2022, according to the latest Counterpoint Market Monitor data. Shipments have hit their lowest point since Q3 2020.

Xiaomi’s Global Shipments and Market Share, Q1 2020-Q1 2022

With the ongoing shortages of key components such as 4G SoC, COVID-19 resurgence in some regions, and global macroeconomic headwinds, Xiaomi’s smartphone shipments declined 20.6% YoY in Q1 2022 against the global decline of 8.1% and China market decline of 18.1%, according to Counterpoint’s Market Monitor data.

Commenting on Xiaomi’s smartphone sales, Senior Analyst Ivan Lam said, “Q1 is usually a seasonal low point for all OEMs. But Xiaomi’s smartphone sales declined more than the market. Historically, Xiaomi built its base with entry-level and budget mid-end smartphones such as the Redmi 9A/9C and the Redmi Note series. Therefore, the LTE chipset shortage weighed on Xiaomi’s performance in the lower-end segments. However, we can also see the ASP (average selling price) for Xiaomi’s phones increasing to CNY 1,189 (around $176), which may be the only thing to cheer about in its Q1 2022 numbers.”

Xiaomi’s cost of smartphone sales decreased by 8.1%, primarily due to the reduction in sales, partially offset by an increase in average cost of sales due to a higher proportion of mid-range and premium smartphone shipments. Commenting on the sales activities, Lam said,  “Xiaomi had a bumpy ride in its offline channel expansion in China. After spending big amounts along with offline partners, Xiaomi saw no change in its share of offline sales. To make matters worse, Xiaomi now has a high inventory, especially of mid-to-high-end and high-end smartphones. This has pushed Xiaomi to spend more on promotion activities. We observed that its number of inventory turnover days at the end of Q1 2022 was much higher than in Q1 2021. A high inventory is a danger sign for Q2 2022 as COVID-19 lockdowns are on in some major Chinese cities, reducing people’s ability to purchase new smartphones.”

Xiaomi's Global Revenue Mix

Xiaomi’s IoT and lifestyle products segment saw a 6.8% YoY increase and 22.3% QoQ decrease in Q1 2022. The company’s TV product sales in China lead the show for this segment, retaining the No. 1 spot in the home market for 13 quarters now. Commenting on the performance of this segment, Senior Analyst Yang Wang said, “With 26.6% of the total group revenue, IoT and lifestyle products are a major revenue contributor. However, the segment is not making much money compared to the smartphone segment. And the increase in the profit is mainly attributable to the decreased price of key components such as display panels. In wearable products too, Xiaomi has seen disappointing results. Though it is the leading smartphone brand in India, Xiaomi’s TWS and smartwatch models have not been able to enter the top five brands lists. India’s TWS and smartwatch shipments grew 66% and 173% YoY respectively in Q1 2022 but still, Xiaomi was left out. It could have done better in its second-biggest revenue contributor.”

Xiaomi’s internet services business grew to 9.7% of the company’s total revenue in Q1 2022, registering an 8.2% YoY increase and 2.2% QoQ decrease. The QoQ decrease is due to poor smartphone sales. Commenting on Xiaomi’s internet services segment, Research Analyst Archie Zhang said, “Xiaomi’s internet services segment is continuously bringing positive news against the backdrop of Google grabbing a big portion of such revenue in overseas markets. Xiaomi just passed the 500-million installed base mark to join Samsung and Apple, but it needs to take innovative approaches to monetize the traffic from its products sold overseas.”

In its financial statement, Xiaomi had little information to share on its smart electric vehicle project, the R&D spending on which stands at 12.2% of the overall R&D expense. The statement also mentioned an ongoing investigation by India’s government into some allegations against the company.


Xiaomi Q4 2021 Update

Xiaomi Wraps Up 2021 on a Strong Footing, Despite Challenges

March 23, 2022

With a 9.6% sequential increase in total revenue in Q4 2021, Xiaomi has partially recovered from its underwhelming performance in Q3. In terms of segment performance, its smartphone revenues increased 18.4% YoY. IoT and Lifestyle products and Internet services also saw 19.1% and 17.7% YoY increases respectively.

The company’s latest financial data is also in line with Counterpoint’s Market Monitor data, which shows Xiaomi’s smartphone shipments increased 4.7% YoY and 1.4% QoQ in Q4 2021. The slower increase in smartphone shipments growth as compared to revenue growth illustrates that Xiaomi has made fairly good progress upgrading its portfolio and improving its smartphone average selling price (ASP). Correspondingly, Xiaomi’s gross margin from smartphones improved from 8.7% in 2020 to 11.9% in Q4 2021.

Xiaomi’s Global Shipments and Market Share, Q4 2019-Q4 2021

Xiaomi’s Global Shipments and Market Share, Q4 2019-Q4 2021
Source: Counterpoint Market Monitor Data

Commenting on Xiaomi’s smartphone salesSenior Analyst Ivan Lam said, “Counterpoint’s Market Monitor data shows that Xiaomi’s smartphone shipment growth has underperformed the global market total in Q4 2021. Key component shortages, especially in LTE, constrained Xiaomi’s low-end smartphones sales. However, the increase in ASP helped Xiaomi to keep up with revenue growth. The company is moving in the right direction as it has tried to contain the share of entry-level smartphones.”

Xiaomi’s IoT and Lifestyle products segment saw record performance in 2021, with revenue coming in at RMB 25 billion in Q4, up 19% YoY. Commenting on the performance of this segment, Senior Analyst Yang Wang said, “IoT and Lifestyle products are becoming more and more important to leading smartphone OEMs. Those products can be sold into the same channels as smartphones in most regions, and can therefore be boosted by the same marketing halo effect, such as bundled sales, promotions and new product launches. Notably, Xiaomi’s TVs, laptops, tablets, wearables, and home appliances saw good sales, due to Xiaomi’s affordable pricing strategy.”

Last but not least, Xiaomi’s internet services revenue reached a record RMB 7.3 billion in Q4 2021, translating into a growth of 17.7% YoY. This was attributed to the advertising business, as well as a 79.5% YoY growth in overseas markets.

Xiaomi’s Global Revenue Mix and Share, Q4 2018-Q4 2021

Xiaomi Revenue Mix Share Q4 2018-Q42021
Source: Xiaomi financial report, Counterpoint analysis

During the earnings call, Xiaomi disclosed that revenue from the smartphone segment grew 37%, and was still the biggest contributor to the company in 2021 at 63.6%. Smartphones’ cost of sales remained stable at 56.0% in 2021, as compared to 56.5% in 2020. The cost structure has thus improved by pushing up the ASP.

Internet services made 8.6% of total revenue in 2021. Commenting on Xiaomi’s internet services segment, Research Analyst Archie Zhang said, “Xiaomi’s internet services segment has shown decent growth momentum. Notably, overseas services revenues grew 18.8% YoY in 2021. However, Xiaomi faced several challenges, including more stringent regulations around targeted advertising and privacy, and a weak home market due to sluggish performance of the big internet companies in China.”

Xiaomi closed the buy-out of the 50.09% stake of Zimi International Incorporation that it does not already own. By bringing the ‘ecosystem’ company under its control, Xiaomi can boost its offers in accessories such as mobile power banks, wireless chargers, and smart home accessories. Xiaomi also acquired Deepmotion Tech Limited, a company specializing in advanced driver-assistance systems (ADAS) and automated driving applications. Xiaomi announced that the mass production of its smart electric vehicle will officially begin in the first half of 2024.


Xiaomi Q3 2021 Update

Xiaomi’s Growth Pegged Back by Component Shortages

November 24, 2021

Hit by the ongoing global component shortages, Xiaomi’s smartphone revenues nearly came to a halt in Q3 2021, growing just 0.5% YoY and falling 19% QoQ. Therefore, the strong momentum and fast expansion seen in Xiaomi’s smartphone segment after Huawei’s fall ended after a year. Xiaomi’s internet services segment provided a silver lining but its average revenue per user (ARPU) continued to fall.

The company’s latest financial data is also in line with Counterpoint’s Market Monitor data, which shows Xiaomi’s smartphone shipments dropping 4.7% YoY and 15.3% QoQ in Q3 2021. The slower decrease in smartphone revenue growth compared to shipments illustrates that Xiaomi made fair progress in improving its smartphone average selling price (ASP).

Xiaomi’s Global Shipments and Market Share, Q3 2019-Q3 2021

Xiaomi’s Global Shipments and Market Share, Q3 2019-Q3 2021
Source: Counterpoint Market Monitor Data

Commenting on Xiaomi’s smartphone sales, Senior Analyst Ivan Lam said, “Counterpoint’s Market Monitor data shows that Xiaomi’s smartphone ASP increased more than 7% YoY to $180 in Q3 2021 but dropped about 3% QoQ. The increase in ASP helped Xiaomi to keep revenue flat from the figure of Q3 2020. Since Xiaomi aims to double down on its premium product strategy, we can expect its ASP to continue to increase. On the other hand, component shortages will also play out, especially for Xiaomi products, which boast to have ultra-low profit margins.”

Xiaomi did have some good news in Q3 2021. The company’s internet services revenue reached a record RMB7.3 billion, translating into a growth of 27.1% YoY and 4.3% QoQ, fastest among all segments.

Xiaomi's Revenue Breakdown: Q3 2021
Source: Xiaomi financial report, Counterpoint analysis

At an earnings call, Xiaomi disclosed that its overseas services revenue accounted for 19.9% of its whole internet services segment. The share was more than 500 basis points higher from the previous quarter.

Commenting on Xiaomi’s internet services segment, Senior Analyst Yang Wang said, “Xiaomi’s internet services segment has shown a great growth momentum. Especially, the overseas services revenue grew more than 110% YoY in Q3 2021. We believe India will continue to be the key growth region. The revenue from mainland China will face more uncertainties given sluggish advertising growth at major internet companies. Xiaomi can partner with these internet companies, providing them key data for ad personalization. We think this downturn in China advertising will reflect in Xiaomi’s earnings in the coming quarters.”

Moreover, Xiaomi’s ARPU has dropped for five quarters to RMB15.1. This has been due to the difficulty in competing against Google in the global market. Xiaomi still can’t commercialize data as efficiently as it does in China.

Xiaomi Q2 2021 Update

Smartphone Sales Soar as Company Reports Best Quarter on Record

September 8, 2021

Xiaomi saw a record-setting Q2 2021 with revenues growing 64% and net income surging 80% from the same period a year ago. This performance was driven largely by strong smartphone sales, which reached 52.5 million units in Q2, according to Counterpoint Research’s Market Monitor service.

Smartphone sales growth was broad-based for Xiaomi across most regions. The company has focused on emerging markets such as Southeast Asia, Middle East and Africa, and Latin America, where sales grew 99%, 206% and 229% respectively in YoY terms. Even in the more developed European markets, Xiaomi’s sales grew 109% YoY.

Commenting on Xiaomi’s smartphone product strategy, Senior Analyst Ivan Lam said, “Our numbers show the average selling price (ASP) of Xiaomi phones reached the highest ever at $185 in Q2 2021. This is an increase of 7.3% in YoY terms, driven mainly by the performance of premium products such as the Mi 11 series. We expect Xiaomi to double down on premium segments to uplift its brand in home market China, and high ASP markets like Western Europe, where Huawei’s fall has left a vacuum in the premium range.”

Looking at Xiaomi’s revenue growth by business type, the smartphones, services and IoT segments grew 86.8%, 19,1% and 35.9% respectively in YoY terms. The company’s business is now more than ever dependent on its smartphone segment, which accounts for two-thirds of the total revenue.

Commenting on Xiaomi’s services segment performance, Analyst Archie Zhang said, “While Xiaomi’s smartphone business performed extremely well, there still is a lot of potential to tap into its services segment. During a period when smartphone sales almost doubled, services revenue growth lagged. The average revenue per user (ARPU) in Q2 2021 actually dropped 10% to RMB 15.5, suggesting that monetizing user traffic on smartphones in new geographies is not as straightforward.”

Within Xiaomi’s services segment, advertising revenue was up 46.2%, while gaming revenue dropped 10.7% and value-added services (VAS) revenue dropped 10.3%. Gaming and VAS are likely to face further pressure due to online gaming and financial services regulatory controls in China. Therefore, advertising will become crucial to Xiaomi’s services success, and we expect it to beef up collaborations with leading internet companies and expand partnerships abroad.

Despite these challenges, the services segment’s gross profit margin soared to 74.1% compared to 60.3% a year ago. With a revenue contribution of only 8%, the segment contributed to 35% of the company’s gross profit. Given the company’s stated intention to keep smartphone margins low, we expect services to continue to do the heavy weightlifting for Xiaomi’s bottom line in the future.

* Key Southeast Asia countries include Indonesia Thailand Philippines and Vietnam

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Global Smartphone Market at Lowest Q3 Level Since 2014

  • The global smartphone market declined by 12% YoY even as it grew by 2% QoQ to reach 301 million units in Q3 2022.
  • While quarterly growth in Apple and Samsung pushed the global smartphone market above 300 million units, a level it failed to reach last quarter, political and economic instability drove negative consumer sentiment.
  • Apple was the only top-five smartphone brand to grow YoY, with shipments increasing 2% YoY, growing market share by two percentage points to 16%.
  • Samsung’s shipments declined by 8% YoY but grew 5% QoQ to 64 million.
  • Xiaomi, OPPO* and vivo, recovered slightly after receiving heavy beatings due to lockdowns in China in Q2, and as they captured more of the market ceded by Apple and Samsung’s exit from Russia.

London, New Delhi, Hong Kong, Seoul, Beijing, San Diego, Buenos Aires – October 28, 2022

The global smartphone market remained under pressure given deteriorating economic conditions with shipments declining by 12% year-on-year, reaching 301 million units in Q3 2022, according to the latest research from Counterpoint’s Market Monitor service. Ongoing international political tensions resulting in economic uncertainty hit the smartphone market even though it reversed its slide below the 300-million-mark last quarter thanks to a slight quarterly recovery in Apple and Samsung shipments.

Commenting on overall market dynamics, Senior Analyst Harmeet Singh Walia said, “Most major vendors continued experiencing annual shipment declines in the third quarter of 2022. Russia’s escalating war in Ukraine, ongoing China-US political distrust and tensions, growing inflationary pressures across regions, a growing fear of recession, and weakening national currencies all caused a further dent in consumer sentiment, hitting already weakened demand. This is also adding to a slow but sustained lengthening of smartphone replacement cycles with smartphones becoming more durable and as technology advancement slows. This is accompanying, and to a smaller degree advancing, a fall in the shipments of mid- and lower-end smartphones, even as the premium segment weathers the economic storm better. Consequently, and thanks to an earlier launch of the latest iPhone series this year, Apple emerged as the only top-five smartphone vendor to manage annual shipment growth in the quarter.”

While Samsung grew QoQ in Q3 2022 thanks to record presales of its premium fold and flip smartphones, compared with the same quarter last year, however, its shipments fell by 8% YoY. This is primarily down to dampening consumer sentiment in several of its key markets. This also affected top Chinese brands, whose shipments remained low compared with last year as they were getting rid of excess inventory and at the same time managing a slowdown in the home market, China. However, they were able to capitalise on Apple and Samsung’s exit from the Russian market, in which their share increased substantially.

Associate Director Jan Stryjak noted, “With the full force of the latest iPhone launch being felt in Q4, we expect further quarterly improvement in the coming quarter, although central banks’ attempts to control inflation will further reduce consumer demand. The channel inventory is still higher, and the OEMs will focus on getting rid of excess inventory in Q4 as well. Hence, shipments are unlikely to reach last year’s levels, let alone pre-pandemic Q4 levels of over 400 million units. Looking further ahead into 2023, we expect sluggish demand with lengthening replacement rates, especially in the first half of the year.”

*OPPO includes OnePlus from Q3 2021

Feel free to reach us at for questions regarding our latest research and insights.


You can also visit our Data Section (updated quarterly) to view the smartphone market share for WorldUSChina and India.

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Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.


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Xiaomi’s Smartphone Strategy Under Scanner

Xiaomi’s numbers for the third quarter show the impact of the ongoing global component shortages on its balance sheet. Revenues grew just 0.5% YoY and plunged 19% QoQ, while quarterly sales growth was slowest in more than a year. All this has prompted many to question Xiaomi’s business strategies. But Xiaomi is already at work, picking areas for improvement and finding ways to tackle external factors.

Xiaomi’s Global Smartphone Shipment Share
Source: Counterpoint Research Smartphone Tracker

Xiaomi was the first OEM to bet big on combining internet characteristics with consumer electronics, especially e-commerce. The way the company built the connection between the brand and the consumer conveyed that it wanted to cut hardware and channel margins as much as possible. This was indeed a disruptive strategy for the market 10 years ago. Other OEMs in China were forced to adopt the same strategy. If we look at this 10-year period, this is how leading smartphone OEMs have survived:

  1. Adopted the internet brand strategy, where online-centric brands were launched. Examples: Xiaomi, realme, OnePlus.
  2. Adopted the internet brand strategy while leveraging the offline networks at the same time. Example: HONOR.
  3. Continued the offline strategy while targeting a decent pie of internet sales at the same time. Examples: OPPO, vivo.

Xiaomi, with its strong value-for-money and predominantly below-$300 product portfolio, has grabbed a huge market share globally, especially in the past three years. This is due to two main reasons.  First, Xiaomi has managed to take a big share from the local brands, which were mainly getting their supplies from Chinese ODMs and, therefore, lacking in pricing advantage and core competency in software. Second, the local OEMs are not in a position to match Xiaomi’s marketing muscle. Therefore, with the right kind of penetration strategy, it can be a very potent mass market alternative. But today, other players too are playing the same “internet brand” game as Xiaomi and are close behind.


Xiaomi’s China Smartphone Shipment Share
Source: Counterpoint Research Smartphone Tracker

What has caused Xiaomi’s undulating performance in the past few quarters? Globally, Xiaomi experienced the ongoing SoC shortage, as was mentioned in its latest quarterly earnings call. Xiaomi’s main shipment contributors are 4G-enabled smartphones, especially those below $300. 4G SoCs also happen to be the ones facing the biggest shortage gap in smartphones.

In Xiaomi’s home country, China, it continued to struggle in the offline market. OPPO and vivo held more than 65% share in the offline market, while HONOR’s strong return meant a huge impact on Xiaomi. In Q2 2021, with the big e-commerce festival of “618”, Xiaomi beat expectations. But in Q3 2021, there was no such festival, which led to Xiaomi’s underperformance. Xiaomi has been working to overcome downsides:

  1. It is working to ease component shortages, especially in SoCs.
  2. It is trying to raise its ASP by targeting the mid-to-high segment.
  3. It is doing offline channel mapping to better target the segment, though this segment takes time to produce results.

Xiaomi will perform much better in online sales in Q4 2021 when two big e-commerce festive sales of Singles’ Day (11.11) and Double 12 take place.

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Q2 2021: Apple Achieves Record June Quarter Shipments, Xiaomi Becomes the Second-Largest Smartphone Brand Globally

  • Global smartphone market grew 19% YoY but declined by 7% QoQ as 329 million units were shipped, led by Samsung.
  • Xiaomi eclipses 50 million smartphones, becoming the world’s second-largest smartphone brand for the first time ever.
  • Samsung retained the number one spot with shipments reaching 58 million units in Q2 2021, however, its market share declined to 18% as compared to 22% in Q1 2021 as its shipments declined by 24% QoQ.
  • realme grew by 135% YoY and 17% QoQ, crossing cumulative shipments of 100 million smartphones since its entry into the smartphone market.
  • Global smartphone shipment revenues grew by 25% YoY to $96 billion in Q2 2021 setting a second-quarter record.

Seoul, Taipei, Beijing, London, Denver, Boston, Toronto, New Delhi, Hong Kong – July 29th, 2021

Global smartphone shipments declined by 7% QoQ in Q2 2021, according to the latest research from Counterpoint’s Market Monitor service. This was primarily due to ongoing component shortages as well as the implementation or extension of COVID-19 restrictions across Asia and Europe. Shipments, however, grew by 19% YoY as inoculation rates increased in several major economies preventing the need for lockdowns as stringent as those seen in the same quarter of last year.

Commenting on OEM rankings, Research Director, Tarun Pathak noted, “While Samsung retained the top spot, its market share fell by over 3% to 18% in Q2 2021. Shipments were down due to weak seasonal demand in some of its key regions such as India, Central and Latin America and Southeast Asia followed by production disruption in Vietnam due to COVID-19. Xiaomi had its best-ever quarter as it was able to increase its market share in China, Southeast Asia and Europe. While Apple fell to the third spot, it captured record second-quarter shipments thanks to persistent demand and supply for its iPhone 12 series. OPPO and vivo retained their spots in the top five as OPPO continued expanding to overseas markets and vivo managed to lead the China market for the second quarter in a row.”

Highlighting the revenue dynamics, Research Analyst, Aman Chaudhary noted, “Global smartphone wholesale shipment revenues eclipsed $96 billion*, up 25% YoY but declined 16% sequentially. This comes at a time when the industry was facing supply constraints. Apple captured a record second-quarter revenue share of 41% driven by continuing demand for the iPhone 12 Series followed by Samsung, OPPO, Xiaomi and vivo. However, Xiaomi had a strong quarter in terms of revenue as well, becoming the only brand within the top five to grow its revenue sequentially. It captured its highest-ever revenue share of over 9% driven by the strong performance of Redmi Note and the Mi 11 series.”

Commenting on Xiaomi’s record shipments, Senior Analyst, Harmeet Singh Walia noted, “Xiaomi crossed 50 million shipments for the first time ever driven by a combination of premium and low-to-mid price segment devices. Xiaomi’s exceptional performance comes despite a decline in India due to the spread of new COVID-19 variants. The increased shipments can be attributed to its growth in regions including Europe, Southeast Asia and Central and Latin America where it captured market share vacated by Samsung and Huawei. Southeast Asia and Europe were bright spots for Xiaomi as demand for mid-tier devices increased during the quarter.”

Key Takeaways:

  • Samsung’s quarterly shipments declined by 24% QoQ and grew by a meagre 7% YoY reaching 57.9 million units in Q2 2021 due to supply constraints. Samsung’s revenue fell by 30% QoQ despite increasing by 7% YoY in Q2 2021. Samsung is diversifying its product mix and channel strategy in regions such as India, Europe and Central and Latin America. Samsung has also shifted focus towards premium devices over the mid-range series on the supply side in regions such as the US where supply constraints and low inventory limited its growth.
  • Xiaomi recorded a QoQ shipment growth of 8% while its shipments grew by a staggering 98% YoY driven by the strong demand for Redmi 9, Note 9 and Note 10 series. Demand for its premium Mi 11 series remained strong as well. This mix of premium and lower-to-mid segment devices enabled Xiaomi to achieve its highest-ever smartphone revenue in Q2 2021.
  • Apple’s smartphone shipments fell by 18% QoQ but grew by 30% YoY to reach 48.9 million units in Q2 2021. This is because demand for iPhone 12 series remained high while its supply was not hit as severely by chip shortages because of its strong industry relationships, careful supply chain management, expedited shipping, and ability to cut days from factory to point-of-sale. Apple saw its revenue increase by 52% YoY.
  • OPPO’s shipments declined by 12% QoQ to 33.6 million units in Q2 2021. Its market share declined to 10% compared with last quarter’s 11%. However, driven by its global expansion and steady performance in China, it saw a growth of 37% compared with the same quarter last year when it enjoyed 9% market share. Following the shipment trends, OPPO’s YoY revenue also declined by 10% QoQ while increasing by over 50% YoY.
  • vivo‘s shipments declined by 8% QoQ but grew by 44% YoY to reach 32.5 million units in Q2 2021. vivo’s growth was driven by a strong performance in the China market, where it has retained the leadership position for a second consecutive quarter. vivo saw a quarterly decline in revenues of 10%, in line with the decline in its shipments over the same period. However, it saw YoY revenue growth of 69% driven by solid performances of its mid-tier models such as S9, Y52s and Y31.
  • Among other major OEMs, OnePlus, realme, and Lenovo Group grew the fastest. OnePlus grew by 170% YoY in Q2 2021 with its Nord N series doing particularly well in the North America and Western Europe markets. realme grew by 135% YoY in Q2 2021 as a result of its continuing success in China as well as its expansion in Southeast Asia where its C-series, launched in March this year, did exceptionally well. realme also reached the landmark of hitting 100 million in cumulative shipments since launch. Apart from this, it also reached 50 million units in cumulative shipments in India during the quarter, the fastest by any brand so far in India. Lenovo Group grew by 110% thanks to the success of its Moto E7 Plus in Latin America and Moto G Play 2021 in North America.

*Preliminary revenue, based on wholesale pricing.

Note: All shipments are preliminary and subject to change.


For press comments and inquiries please reach out to press (at)

You can also visit our Data Section (updated quarterly) to view the smartphone market share Globally and from the USA, China, and India.

Some of our other regional smartphone market analysis for Q2 2021 can be found below:

India Smartphone Market Stays Resilient During Second COVID-19 Wave, Crosses 33 Million Shipments

US Smartphone Market Grows 27% YoY in H1 2021 Despite Shortages; OnePlus, Motorola, Nokia HMD Gain as LG Exits

China Smartphone Market Sees Lowest Q2 Sales Since 2012; vivo Leads as Huawei Plummets


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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