Xiaomi struggled in the third quarter as it dealt with the effects of a worldwide semiconductor shortage as well as increased competition.
According to Counterpoint Research and Canalys, the Chinese business, which had just recently become the world’s second-largest smartphone manufacturer, slipped to third position behind Apple (AAPL) in the three months ending September.
Xiaomi stated in a statement on Tuesday that the prolonged semiconductor scarcity has had a significant impact on its smartphone business, which it expects to continue into the first half of next year.
“This year, there is a unique background, in that there is a global component scarcity,” says the author.
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On an earnings call, Xiaomi’s president, Wang Xiang, stated. “The scarcity is a significant issue for us.” In the third quarter of 2021, the business shipped 43.9 million smartphones throughout the world, down approximately 6% from the same time previous year.
Xiaomi refers to smartphones as the “cornerstone” of its company, which also includes other connected products like home appliances. The corporation has just launched a push towards electric vehicles, with intentions to mass build the first vehicle in the first half of 2024.
After leapfrogging Apple to become the world’s second best-selling maker this summer, it piqued the interest of investors. In the three months ending in June, the Beijing-based company’s exports surged, following only those of Samsung (SSNLF). Xiaomi, on the other hand, has been struck hard by supply chain issues since then.
While component shortages have impacted nearly every manufacturer, Xiaomi, according to Tarun Pathak, a research director at Counterpoint, had to deal with more issues owing to its broad portfolio.
According to him, the corporation supplied more than 50 distinct smartphone models in the most recent quarter, compared to around 14 for Apple.
This adds to the intricacy and makes it “difficult,” according to Pathak. “Because you’re dealing with a variety of components.”
According to him, Apple’s relative lack of exposure to the problem helped them retake second place in the race in the third quarter.