XIAOMI LAUNCHES MI MIX ALPHA

Beijing, CHINA, September 24 2019 –– Global technology leader Xiaomi today announced the release of Mi MIX Alpha concept smartphone. Mi MIX Alpha is a result of Xiaomi’s bold imagination for the future of phones in the 5G era.

Mi MIX Alpha showcases an innovative Surround Screen with a screen-to-body ratio of more than 180.6%. The device features the world’s first 108MP camera, and is crafted with a one-of-a-kind combination of titanium alloy, ceramics and sapphire to make for a revolutionary concept phone.

Xiaomi’s Mi MIX exploration began in 2016 when the company introduced the revolutionary Full Screen Display smartphone concept — an industry first. It was also Mi MIX that pioneered a smartphone screen ratio exceeding the standard 16:9 aspect ratio. Today, full screen displays have become the standard configuration of smartphones.

Since its debut, the Mi MIX series has represented innovation at its finest as Xiaomi sought to reimagine the modern day smartphone. In addition to the Full Screen Display, Mi MIX also embraced cantilever piezoelectric ceramics acoustic technology, ultrasonic proximity sensor, and revolutionary build materials. 

World’s first Surround Display – display almost on all sides

Carrying the original Mi MIX exploration spirit, when Mi MIX Alpha lights up – the front, side, and back of the phone are almost entirely display. The Surround Display allows Mi MIX Alpha to achieve a screen-to-body ratio that reaches an astonishing 180.6%.

Behind the Surround Display is a series of groundbreaking technologies that required a new method of device assembly. Unlike traditional smartphone assembly methods, Mi MIX Alpha’s internal assembly is first carried out, while its display layer, touch panel, and protection layers are laminated one-by-one. All display component layers are compiled in that order to achieve high curvature Surround Display design, so the internal stress caused by bending the display layers can be released layer by layer. To achieve a smooth and flat surface, Mi MIX Alpha also uses a durable protective layer which optimizes the screen stack structure.

To accommodate the nearly all-screen offering, Mi MIX Alpha has minimal bezels on the top and bottom, and ditches the physical side buttons altogether. A brand-new display acoustic technology replaces the traditional earpiece receiver and proximity sensor while the device’s sides are pressure-sensitive and leverage a linear motor to simulate the touch of real buttons.

108MP camera world debut – another milestone for smartphone photography

Mi MIX Alpha features a 108MP camera with the highest resolution, highest pixel count, and the largest sensor found in any smartphone ever – marking another important milestone in smartphone photography.

The main 108MP camera sports a 1/1.33-inch large sensor –  389% larger than the 48MP camera. This image sensor is capable of producing 108MP photos with a resolution of 12032 x 9024 pixels and supports four-in-one Super Pixel to produce large 1.6μm pixels under low-light conditions. The camera also supports new technologies such as ISOCELL Plus and smart ISO, and is equipped with four-axis optical image stabilization (OIS) to ensure stable videos.

In addition to the 108MP camera, Mi MIX Alpha also has a 20MP ultra wide-angle camera which supports 1.5 cm super macro photography, and a 12MP telephoto camera that supports 2x optical zoom and Dual PD focus.

Luxurious titanium smartphone with 5G flagship performance

In addition to its innovative Surround Display, Mi MIX Alpha’s top and bottom parts of the frame are built with aerospace-grade titanium alloy. The alloy is three times stronger than stainless steel but weighs less. On its back, the entire protective cover for the camera area uses a single piece of sapphire glass, which is embedded in ceramic.

On the performance front, Mi MIX Alpha uses the same flagship-grade Snapdragon 855+ mobile SoC as the Mi 9 Pro 5G and supports 5G bands of the three major carriers in Mainland China. The device also features the top-tier 12GB+512GB memory and storage combination, and supports UFS3.0. Mi MIX Alpha is equipped with a 4050mAh battery and comes with a standard 40W wired fast charge.

The mission of Mi MIX concept smartphone is to make a truly disruptive product without considering the costs and return, and without considering mass production. Xiaomi aims to start small-scale production for Mi MIX Alpha at the end of December and retails at RMB 19,999.

Links to product images: Mi MIX Alpha

 

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About Xiaomi Corporation
Xiaomi Corporation was founded in April 2010 and listed on the Main Board of the Hong Kong Stock Exchange on July 9, 2018 (1810.HK). Xiaomi is an internet company with smartphones and smart hardware connected by an Internet of Things (IoT) platform at its core.

With the vision of being friends with its users and being the “coolest company” in the hearts of its users, Xiaomi is committed to continuous innovation, with an unwavering focus on quality and efficiency. The company relentlessly builds amazing products with honest prices to let everyone in the world enjoy a better life through innovative technologies.

Xiaomi is currently the world’s fourth-largest smartphone brand, and has established the world’s largest consumer IoT platform, with more than 196 million smart devices connected to this platform, excluding smartphones and laptops. Currently, Xiaomi products are present in more than 80 countries and regions around the world and have a leading foothold in many of them.

In July 2019, Xiaomi for the first time made the Fortune Global 500 list, ranking 468th among all, and 7th in the Internet Services and Retailing category. It is also the youngest Global 500 company of 2019.

Xiaomi’s adjusted net profit increased 20.3% in the third quarter

Total revenue hits record high since founding
Both total revenue and net profit beat consensus
AIoT continued to make significant progress
Overseas business developed rapidly

Hong Kong, 27 November 2019 — Xiaomi Corporation (“Xiaomi” or the “Group”; Stock Code: 1810), an internet company with smartphones and smart hardware connected by an Internet of Things (“IoT”) platform at its core, today announced its unaudited consolidated results for the third quarter of 2019 ended September 30, 2019 (“3Q2019” or “the Period”). During the Period, the Group’s total revenue increased by 5.5% year-on-year (“YoY”) to RMB53.7 billion, making 3Q2019 the quarter with the highest total revenue since founding. Adjusted net profit was RMB3.5 billion, increased by 20.3% YoY. The Group’s total adjusted net profit in the first three quarters totaled RMB9.2 billion, already exceeded the net profit of last year.

During the Period, the Group continued to operate prudently with its risk resistance capacity steadily improved and gross profit significantly optimized. Gross profit increased by 25.2% YoY to RMB8.2 billion. Gross profit margin was 15.3%. Total cash resources amounted to RMB56.6 billion.

3Q2019 Financial Highlights

  • Total revenue was approximately RMB53.7 billion, up 5.5% YoY;
  • Gross profit was approximately RMB8.2 billion, up 25.2% YoY;
  • Non-IFRS adjusted net profit was approximately RMB3.5 billion, up 20.3% YoY;
  • Earnings per share were RMB0.106.

Xiaomi Founder, Chairman and CEO Mr. Lei Jun said, “The Group has made continuous progress with the encouraging result of an expanded user base since the adoption of ‘Smartphone + AIoT’ dual-engine strategy. Following making the 2019 Fortune Global 500 List and Forbes Global 2000 List earlier this year, we also made our debut on the 2019 Fortune Future 50 List and Forbes’ Top 100 Digital Companies List, reflecting the international recognition that Xiaomi has gained with regards to its strength in digital economy and its business strategy. In anticipation of the upcoming era of 5G technology in 2020, the Group will continue to stay alert to market trends and operate prudently. With the Company’s healthy and stable cash flow and profitability, we are ready to capture and respond to the huge market opportunities that will arise from the widespread adoption of 5G technology, and plan to launch at least 10 models of 5G smartphone in 2020.”

3Q2019 Results Review

Improving gross profit of smartphone business on the back of multi-brand advantages

In 3Q2019, due to the downturn in China’s smartphone market, the Group’s revenue from smartphones segment recorded RMB32.3 billion, down 7.8% YoY. The Group adhered to a prudent operation, continuously optimizing its product portfolio and maintained a steady foothold in mid-to-high-end markets on the back of multi-brand advantages. Product profitability has also been continuously improved, with the gross profit margin of smartphones segment reaching 9.0% in the third quarter, achieving a sequential growth of two consecutive quarters. The gross profit margins in the first quarter and the second quarter were 3.3% and 8.1% respectively. The Group’s smartphone sales volume reached 32.10 million units, ranked 4th globally in terms of smartphone shipments, according to Canalys.

Following the introduction of the first Xiaomi 5G smartphone Mi MIX 3 5G in Europe in February this year, Xiaomi launched its first 5G smartphone, Mi 9 Pro 5G in mainland China during the Period, marking another milestone in 5G technology development. In September 2019, Xiaomi released its concept smartphone, Mi MIX Alpha, a futuristic 5G smartphone featuring the world’s first surround display and a screen-to-body ratio of 180.6%, demonstrating the Company’s continuous efforts in exploring cutting-edge technology. The Company introduced Mi CC9 Pro in November 2019, which is the first mass-produced smartphone to carry a 108MP penta-camera. Mi CC9 Pro Premium Edition achieved a DxOMark score of 121 for overall camera performance, ranking 1st globally at the time of launch.

Driven by the success of multi-brand strategy, Xiaomi’s smartphones product portfolio has seen continuous optimization. The average selling price (“ASP”) of the Group’s smartphones in mainland China increased by 4.6% YoY.

AIoT business maintaining a leading edge in the market

Building a new model of smart life

As of September 30, 2019, the number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached approximately 213 million units, increased by 62.0% YoY. The number of users who have five or more devices connected to the Company’s IoT platform (excluding smartphones and laptops) increased to 3.5 million, up 78.7% YoY. Xiaomi’s AI assistant “小愛同學”, one of the most active AI voice interactive platforms in mainland China, had 57.9 million monthly active users (“MAU”) in September.

Revenue of the IoT and lifestyle products grew rapidly 

Mi TVs ranked 1st in mainland China and top five globally

In 3Q 2019, revenue of the IoT and lifestyle products business rose by 44.4% YoY to RMB15.6 billion, and the proportion of revenue gradually increased from 21.3% in 3Q2018 to 29.1% in the third quarter this year. Global shipments of Xiaomi’s smart TVs reached 3.1 million units, increased by 59.8% YoY. According to All View Cloud (“AVC”), Xiaomi ranked 1st in terms of TV shipments in mainland China in 3Q 2019, with a market share of 16.9%. Xiaomi also ranked top five in terms of global TV shipment during the Period.

At the same time, Xiaomi’s large home appliance business has also been fully developed. The Group launched 4 Mi Refrigerator in October, sustaining the cost-effective strategy. This means Xiaomi has officially entered the markets of air conditioners, refrigerators and washing machines, further expanded spectrum of products in the large home appliances category and effectively enhanced the connectivity and compatibility of the whole suite of smart home appliances.

During the Singles’ Day shopping festival in 2019, Xiaomi’s IoT and lifestyle products recorded over 5.55 million in sales volume, increased by 148% YoY. On that day, Xiaomi’s smart hardware ranked 1st in terms of sales volume or sales in 219 categories on three major platforms.

Continued diversification of internet service

In the third quarter, revenue from the Group’s internet services segment grew by 12.3% YoY to RMB5.3 billion. In September 2019, MAU of MIUI recorded 292 million, increased 29.9% YoY. The proportion of revenue from newly developed business in Internet services continued to increase. Revenue in the third quarter accounted for 37.2% of total internet services revenue and representing a YoY increase of 87.8%. Newly developed business of Internet services means internet services outside of advertising and gaming from mainland China smartphones, including revenue generated from IoT (TV) internet services, overseas internet services, Youpin e-commerce platform and fintech business.

In September 2019, MAU of smart TV and Mi Box increased by 50.1% YoY to 23.90 million, with more than 3.2 million paid subscribers representing a YoY growth of 68.8%. Revenue from fintech business increased by 91.2% YoY to RMB1.0 billion.

Revenue from the overseas business developed rapidly

Unlocked growth potential of mid-to-high-end markets in Western Europe 

In recent years, Xiaomi has been committed to expanding its overseas market and the overseas business is quite large at present. The revenue from the overseas markets grew 17.2% YoY to RMB26.1 billion in the third quarter, accounting for 48.7% of total revenue.

According to Canalys, Xiaomi ranked top five in over 40 countries and regions in terms of smartphone shipments. As Western Europe is the key overseas market for the Group in 2019, Xiaomi’s smartphones ranked 4th in terms of smartphone shipments in the Western European market with a YoY shipments growth of 90.9%. Moreover, Xiaomi ranked 1st in open market channels and 2nd in the overall market in Spain in terms of smartphone shipments in the third quarter of 2019 with an overall market share of 22.9%, representing a YoY increase in shipments of 63.7%. In November, the overseas version of Mi CC9 Pro, Mi Note 10, was released in Spain.

Meanwhile, Xiaomi maintained a strong leading edge in India market. According to IDC, Xiaomi’s has ranked 1st in India in terms of smartphone shipments for nine consecutive quarters.

 

About Xiaomi Corporation

Xiaomi Corporation was founded in April 2010 and listed on the Main Board of the Hong Kong Stock Exchange on July 9, 2018 (1810.HK). Xiaomi is an internet company with smartphones and smart hardware connected by an IoT platform at its core.

With the vision of being friends with its users and being the “coolest company” in the hearts of its users, Xiaomi is committed to continuous innovation, with an unwavering focus on quality and efficiency. The company relentlessly builds amazing products with honest prices to let everyone in the world enjoy a better life through innovative technology.

Xiaomi is currently the world’s fourth-largest smartphone brand, and has established the world’s leading consumer IoT platform, with more than 213 million smart devices (excluding smartphones and laptops) connected to its platform. Currently, Xiaomi products are present in more than 90 countries and regions around the world and have a leading foothold in many of them.

In July 2019, the company made the Fortune Global 500 list for the first time, ranking 468th among all, and 7th among internet companies. Xiaomi is the youngest company on the 2019 Fortune Global 500 list.

Xiaomi unveils core technologies at MIDC 2019

Beijing, China, November 19, 2019 – Xiaomi officially announced that an earthquake warning function has been integrated into the company’s user interface MIUI at the annual Mi Developer Conference on Tuesday.

“With the help of the Smartphone + AIoT dual core strategy, Xiaomi will continue its effort in making 5G + AIoT part of daily life for everyone,” said Lei Jun, Founder, President and CEO of Xiaomi.

“Apart from the plan of marketing over ten 5G devices in 2020, we will take great advantage of our world leading position in AIoT to bring the definition of Smart Home to all,” Lei added.

Earthquake warning function in MIUI 11

The world’s first integration of such services in the smartphone operating system, this function allows alerts to be sent to smartphones with MIUI 11 and Mi TV seconds to tens of seconds before the quake waves arrive. It was launched on September 20 on a trial basis when the MIUI 11 was released.

Partnering with Institute of Care-life, a Chengdu-based organization focusing on natural disaster warning, Xiaomi has activated the service first in the earthquake-prone Sichuan Province and will soon expand the program nationwide.

Founded after the devastating Sichuan earthquake in 2008, the institute is world leading in earthquake warning. “Comparing with the earthquake warning alerts sent via smartphone apps available in a few countries, this function integration into the operating system saves users from having to download the apps. It also ensures a timely alert delivery by prioritizing the warning messages and reducing latency,” said Wang Tun, head of the institute.

Fan Dian, General Manager of the IoT platform department of Xiaomi, called for wider adoption of the function by other smartphone and IoT providers and said the company is willing to share its practices and experience.

Xiao Ai 3.0 launched

Xiaomi announced today the update of its Xiao Ai voice assistant to 3.0, which incorporates with a male voice option and the capability of having a naturally continuous dialogue via smartphones.

Behind the functional upgrading, it is Xiaomi’s continuous investment in AI R&D. “Xiaomi’s AutoML model now leads the industry by dataset performance; and MiNLP, the company’s natural language processing platform, is activated over 6 billion times on a daily basis, making Xiao Ai one of the world’s busiest AI platform,” said Cui Baoqiu, VP and Chairman of Xiaomi’s Technical Committee.

By the end of the second quarter, the number of monthly active users of Xiao Ai stood at 49.9 million, making it one of the most used AI voice interactive platforms in mainland China.

Open-source initiatives

As an industry leader, Xiao has insisted on the open-source approach. MACE, the company’s open-source deep-learning framework, announced the arrival of a new version at today’s conference.

MACE-Kit will officially open its source soon, in an effort to further benefit developers. This approach also attracts Daniel Povey, Founder of speech recognition open source tool Kaldi, to join Xiaomi.

Innovations behind Mi MIX Alpha

For the first time, Xiaomi has unveiled the three core technologies behind its recently launched Mi MIX Alpha concept smartphone.

Xiaomi’s innovative layered lamination technology breaks the limit of curved screen and reveals an incredible surround display. Meanwhile, the leading quad antenna solutions optimized for the unique screen form-factor, and its independently-developed UI software solution that revolutionizes screen display and user experience help Xiaomi accomplish its step from zero to one on Surround Display.

Xiaomi Finance

Hong Feng, Co-founder and CEO & Chairman of Xiaomi Finance, said Xiaomi will push forward with industrial finance innovations to better serve partners in manufacturing industry around the globe.

The company has invested in over 270 ecosystem partners, among which more than 100 are focused on the development of smart hardware and lifestyle products. The unique ecosystem model gives the company substantial advantages in supply chain finance and it now serves more than 400 business partners along the chain.

With sophisticated risk management model and technology capability, and extensive user base and supply chain partners, Xiaomi Finance has a solid business foundation and potentials to grow.

Xiaomi Presents Leading-edge Products: Mi CC9 Pro, Mi Watch and Mi TV 5 Series

Beijing, China, November 5, 2019 – Global technology leader Xiaomi, today announced a trio of signature products that reset standards for the industry: Mi CC9 Pro – provides you a glimpse of a world with 108MP camera, Mi Watch – a transformed wearable experience, and Mi TV 5 series – an all-round upgrade for the future home.  

Mi CC9 Pro: Benchmarking Smartphone Photography

Following the groundbreaking concept phone Mi MIX Alpha, Mi CC9 Pro sets another important milestone for the industry to become the world’s first mass-produced smartphone shipping a 108MP camera. The remarkable 108MP main camera offers a 1/1.33’’ large image sensor – twice as large as the mainstream 48MP cameras. It supports OIS and features an industry leading resolution of 12032 x 9024. It also incorporates a 4-in-1 (1.6μm) Super Pixel with the latest RAW multi-frame noise reduction algorithm to capture rich detail, even in low-light conditions. 

Aside from the 108MP camera, Mi CC9 Pro sports a penta camera setup that includes a 12MP telephoto camera, a 5MP telephoto camera, a 20MP ultra wide-angle camera, and a 2MP macro camera. The 12MP telephoto camera supports 2x optical zoom with dual PD autofocus, while the 5MP telephoto camera supports 10x hybrid zoom. All cameras are built with world-class technologies that sufficiently cover your day-to-day needs for smartphone photography from landscape, portraits, close-up shots, and even for 1.5cm super macro photography. 

A premium offering – the Mi CC9 Pro Premium Edition was also announced at launch. It comes with an 8P lens that produces images that are clearer and of higher definition. It also surged to the top of DxOMark camera rankings with an overall score of 121 and broke the record for video segment with a world’s highest score of 104. 

Worth noting is that Mi CC9 Pro Premium Edition scored an unbelievable 109 – 14 points higher than the competitor ranked second – in DxOMark’s sub-testing programme ‘Zoom’, all relying on Mi CC9 Pro Premium Edition’s telephoto camera that supports 10x hybrid zoom and OIS to deliver unbeatable image definition, even when captured from a far-off distances.  

On the hardware front, the Mi CC9 Pro dresses to impress with the flagship two-sided curved screen and a 6.47’’ 19.5:9 Full-HD Display. Adopting a COP sealing technology, Mi CC9 Pro has a 3.43mm chin bezel, making it the most narrow Xiaomi smartphone apart from the Mi MIX Alpha. Mi CC9 Pro also supports 30W fast charge, which brings its 5260mAh high-capacity battery to 100% under 65 minutes. 

Mi CC9 Pro and Mi CC9 Pro Premium Edition will be priced at RMB 2799 and RMB 3499 respectively. Three color variants Aurora Green, Glacier White and Midnight Black will be available on official Xiaomi channels in Mainland China starting November 11, 2019.

 

Mi Watch: Transformed Wearable Experience with MIUI For Watch

Featuring a flagship 1.78’’ AMOLED square screen, Mi Watch offers an immersive viewing experience with a 326 PPi pixel density and an elegant four-side curved design. Being the world’s first wearable to sport a Qualcomm®️ Snapdragon WearTM 3100, Mi Watch guarantees a robust device performance and low power consumption. The device also boasts independent speakers, NFC function, and supports WiFi and Bluetooth connection. 

Equipped with a built-in six-axis sensor and a 3rd generation heart rate monitor (HRM) sensor, Mi Watch is able to precisely detect complex motion gestures and heart rate fluctuations during physical activities. With these capabilities, Mi Watch offers up to 10 pro-sport modes such as outdoor running, outdoor biking, open water swimming, and mountain climbing. It also works with professional sports analytics provider FirstBeat to closely track users’ sleep quality, blood pressure levels, heart rate, and physical energy.

Mi Watch also comes with eSIM, a built-in chip that allows users to make phone calls and connect to the internet effortlessly without inserting a physical nano-SIM. With such technology, users can either share the same phone number with their smartphone for seamless connectivity or have a new private number for the Mi Watch exclusively. 

Adding on to all these flagship features, Mi Watch provides a revolutionary UI experience with the MIUI For Watch system, offering 100+ dial plate selections and 40+ of the most used apps for downloading. It also remains an open system for developers to create tremendous possibilities. XiaoAi AI Assistant can be activated for users to easily use voice commands for music playback, phone calls, and navigation. When connected to the Xiaomi AIoT system, Mi Watch is capable of operating thousands of Xiaomi smart home appliances.

Along with the standard Mi Watch, Mi Watch Special Edition was also announced, with a limited offering of 30,000 units worldwide. Featuring a major upgrade to blue sapphire glass as the screen material, the Mi Watch Special Edition adds a classy, aesthetic touch to your day-to-day look. The package also comes with an in-box magnetic charger, an adapter, laser-printed limited product code, suede cleaning cloth, certification for limited collection, and a personalized nameplate. 

Mi Watch will be available at RMB 1999 for the Black and Silver color variants. Pre-orders start on November 5 via official Xiaomi channels in Mainland China. Mi Watch Special Edition will be priced at RMB 2999 and has a limited number of 30,000 units worldwide, pre-orders will start around mid-December.

 

Mi TV 5: Stunning Display with Futuristic Design

The newly released Mi TV 5 series continues to pursue the limits of craftsmanship by taking the full screen design to the next level. It features a 1.8mm ultra-narrow metal bezel and a 5.9mm slim body, delivering a compact, futuristic design that is perfectly fit for a modern home. 

On the performance front, Mi TV 5 series adopts a flagship 12nm T972 chip that is jointly developed by Xiaomi and Amlogic. It has a core frequency of up to 1.9GHz, allowing a 63% improvement of overall performance compared to its predecessor, while concurrently supporting 8K content decoding.  For storage, Mi TV 5 and Mi TV 5 Pro both provide industry-leading large memory capacity of 3GB+32GB and 4GB+64GB respectively.

Mi TV 5 Pro boasts a 4K quantum dot TV panel and an amazing 108% NTSC color spectrum compared to the industry standard of 72%. It also meets one of the most outstanding HDR standards – HDR 10+ to provide a stunning graphic display for both game players and Blu-ray lovers. MEMC technology is also adopted to ensures a smooth and high-definition motion picture playback.

All Mi TV 5 variants are enabled with a Far-field Voice Recognition technology that allows users to wake theXiaoAi AI Assistant from a distance without the need of a remote control. Hence, it only takes a simple voice command to conduct film searching, weather checking, or smart device operations. Built-in microphones are located right in the middle of the bottom frame and are on stand-by 24 hours a day, ensuring the Mi TV 5’s “XiaoAi AI speaker” is ready even during screen-saver mode.  

Mi TV 5 Pro 55’’, 65’’ and 75’’ variants will be priced at RMB 3699, RMB 4999, and RMB 9999 while Mi TV 5 55’’, 65’’, 75’’ priced at RMB 2999, RMB 3999, and RMB 7999 respectively. Pre-orders start at 18:00 China time on November 5, and sales on official Xiaomi channels in China will start on November 11. 

 

More product images available from: Mi CC9 Pro, Mi Watch, Mi TV 5 

 

CHAIRMAN’S LETTER TO INVESTORS, 2019

Dear investors and friends:

The world is still under the dark shadows of COVID-19 pandemic, and during this difficult time, nothing is more important than your well-being. As such, I sincerely wish good health for you and your loved ones.

We have just released our full year financial results for the year ended December 31, 2019. Besides reporting on our growth, I believe it is equally important for us to share our vision and strategies on how we can overcome economic “black swan” events.

A year of prudent management and proactive progress 

In 2019, Xiaomi exceeded RMB200 billion in revenue for the first time, reaching RMB205.8 billion, an increase of 17.7% year-on-year, as well as adjusted net profit of RMB11.5 billion, an increase of 34.8%. Against the backdrop of uncertainties related to Sino-US trade tensions, Xiaomi’s commendable results stood out in strong contrast.

In 2019, Xiaomi hit a series of significant milestones. We made our inaugural entry into the Fortune Global 500 list, becoming the youngest company on the list. We entered BrandZ’s global brand TOP100 for the first time, ranking 74th. We also accomplished an unprecedented record, becoming the first smart TV brand to ship more than 10 million units annually in China ever.

Foresight, confidence, resilience and strong execution are key to our continued progress

Mobile telecommunications is at a critical juncture globally, as the industry transitions from 4G to 5G. We have adopted a sound business strategy, focusing on product quality, innovation, and delivery, while making key adjustments to our brands, product portfolios, organizational structure, and management systems. Combined together, these initiatives have paved a solid foundation for our future.

We have officially launched a dual-brand strategy for our smartphones business, with the brand separation of Redmi from Xiaomi. Their independent operations have brought us great success. Our market share is consistently ranked among the top four globally, while our healthy and prudent inventory levels have enabled us to step forward boldly with our 5G game plan.  At the end of 2019, close to half of our revenue are derived from overseas markets, making Xiaomi a truly global company. Our Internet Services business has become more dynamic and diverse, while our AIoT business maintained its global leadership, becoming recognized across our industry as a “first mover in smart living”.

Business success on the back of technological innovation

At Xiaomi, we firmly believe that our business success is underpinned by technological innovations, and to that effect, we have continually increased our R&D investment. In 2019, our R&D investment reached RMB7.5 billion, a 29.7% year-on-year increase on the back of substantial R&D expansion for the three prior years. In 2020, we expect our R&D investment to increase to RMB10 billion.

At the same time, we are also proactively attracting top R&D talent from around the world. Recently, we have successfully recruited Daniel Povey, a top international expert in artificial intelligence, to join Xiaomi. Starting from 2019, we have set up the Xiaomi Annual Technology Award, which awards a US$1 million bonus to core R&D project personnel with the highest technical achievements each year. Last year, the award was shared by 10 engineers from the Xiaomi MIX Alpha project.

Our strategic roadmap of “5G+AI+IoT and next generation super internet”

To us, 5G is not merely about a faster smartphone network, while AIoT is also not just about AI technologies or IoT platforms. Instead, “5G+AIoT” will be a revolutionary combination that will fundamentally change all Xiaomi’s products, platforms and user scenarios, catalyzing the next stage of our growth in the next generation of Internet era. At the start of last year, we first proposed our “All in AIoT” initiative, allocating an investment of RMB 10 billion in AIOT over the next five years. One year in, we believe we are moving in an important strategic direction. As such, we will increase our investment to at least RMB 50 billion over the next five years in “5G+AIoT”, to ensure our absolute dominance over the new smart living era.

This bold initiative will enable us to create greater value for you and is a tangible reflection of the philosophy we adhere to: By making a connected world a reality for billions of people globally. We believe technology can be a force for good to improve lives everywhere.

We firmly believe that a connected world is better than an isolated one. We also firmly believe in the economic value created by global collaboration, and how the world can truly change when technology is freely accessible.  During the COVID-19 outbreak, as we witnessed people in isolation connecting with their family, loved ones and even their pets through their smart devices, we could feel the very human desires to connect and to care.

It is famously said that no man is an island. At Xiaomi, we deeply believe in this. As we build the next generation super internet, we will continue to use technology to connect and improve lives everywhere.

Operational efficiency as the ultimate way to overcome crises 

While our industry and the entire world are currently facing huge challenges, we have absolute confidence in navigating through these extraordinary times together with our partners. During this period of adversity, the strength of our operational efficiency will be more obvious than ever.

At Xiaomi, we have always been very focused on efficiency. We believe that the pursuit of efficiency is an exercise in self-discipline and contingency planning.

Having experienced the SARS epidemic and global financial crisis in 2003 and 2008 respectively, my colleagues and I know crises are the ultimate litmus test that separates successful companies from others. Our efficient operations, strong execution capabilities and consumer trust will enable us to seek out opportunities during crises and stay on a sustainable growth trajectory.

During our IPO, we said that a company that is able to achieve world-class efficiency will have the ability to survive multiple economic cycles, continuously seize new opportunities and sustain excellent operational performance in the long run. Now more than ever, we want to reiterate this.

We are also safeguarding our competitiveness through a series of organizational restructuring. Over the past year, we have established the Department of Group Organization to improve our management processes. We have also set up our employee training campus and ramped up our college recruitment efforts. These initiatives form a key part of our overall effort to grow and sustain our operational efficiency.

In the face of challenges, perseverance is key

Our mission is to relentlessly build “amazing products with honest prices” to let everyone in the world enjoy a better life through innovative technology. In order to ensure that we stay true to our mission, our board of directors passed a special resolution before our IPO last year. According to the resolution, we pledged to our existing and potential users that the overall net profit margin of Xiaomi’s hardware business will never exceed 5%.

A commitment to our consumers and a testament to our efficiency

As we stay true to our commitment to our users, we are pleased to share that, similar to last year, our hardware business net margin in the year ended December 31, 2019 maintained positive and less than 1.0%.

It is also worth highlighting that Xiaomi as a standalone smartphone brand has been re-launched early last year. With the release of Mi 9, Mi 9 5G and Xiaomi CC 9 Pro last year, and the release of the Mi 10 series earlier this year, it is proven that the Xiaomi brand can move upscale while continuing to win over our users via “amazing products at honest prices”.

Despite the impact of COVID-19, we remain optimistic about our future prospects. To date, our supply capacity has recovered to 90% of normal levels and we are seeing light at the end of the tunnel in China. Fortune favors the brave and this year, Xiaomi will continue to act swiftly and decisively.

In a few days, we will celebrate our tenth anniversary on April 6th. Over the past ten tumultuous years, Xiaomi has created a series of miracles. In the next ten years, we will continue to steadily move forward, turning Xiaomi’s vision into reality. Thank you for trusting us, investing in us, and joining us in our journey to let billions of people around the world enjoy better lives through innovative technology.

 

Lei Jun

Chairman

March 31, 2020