SHENZHEN - Chinese smartphone maker Xiaomi Corp reported a 4% revenue drop in the second quarter, tracking a shrinkage in China's handset market, but said its move into making electric vehicles was running ahead of schedule.
Sales dropped to 67.4 billion yuan ($9.2 billion) from 70.17 billion in the same quarter a year earlier, beating analysts' estimates of 65.13 billion.
Net income rose to 5.14 billion yuan over the period, an increase of 147% from 2.08 billion yuan a year earlier, also beating expectations. The company put the increase down to cost-cutting and efficiency improvements, particularly in its physical stores.
"Despite the macroeconomic headwinds in the global market we continue to expand our footprint," Xiaomi President Lu Weibing said on an earnings call.
"Several of our peers already exited from certain areas in this challenging environment, but no matter how hard it will be we will reinforce our presence across regions and markets," Lu said.
Consumer demand in China's smartphone market continued to shrink in the second quarter, dropping 5% to 64.3 million units, according to Canalys, a consultancy that tracks the smartphone industry.
Xiaomi's shipments declined by 19% to 8.6 million, while in major overseas market India, shipments fell 22% to 5.4 million units, Canalys said.
In light of declining handset sales, Xiaomi is planning to move into the manufacture of electric vehicles (EVs) and has received approval from China's state planner, Reuters reported this month.
The company has pledged a $10 billion investment over a decade in the automobile business.
Lu said the company's plans to start mass production of EVs in the first half of 2024 remain unchanged. "Our current progress is ahead of expectations and of the original production schedule," he said.
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