Strategic Moves: EV Sector and Smartphone Market

Xiaomi’s entry into the smart Electric Vehicle (EV) market and continuous innovation in the smartphone segment have been central to its financial success.

The company retained its position as the third-largest smartphone vendor globally, with a total shipment of approximately 145.6 million units.

A notable strategy was the premiumization of its smartphone offerings, which led to an over 19% increase in the average selling price in mainland China.

Growth in IoT and AIoT Platforms

Revenue from Xiaomi’s IoT and lifestyle products reached RMB 80.1 billion, with a gross profit margin of 16.3%.

The number of connected IoT devices on Xiaomi’s AIoT platform as of December 31, 2023, stood at 739.7 million, a 25.5% increase year-over-year.

This expansion is reflective of Xiaomi’s strong position not only in the domestic market but also internationally, with significant presence and market share growth in various regions including the Middle East, Latin America, Africa, and Southeast Asia.

Future Directions: R&D and Global Technology Leadership

Xiaomi announced its strategic goals for 2020–2030, emphasizing long-term investment in foundational core technologies to assert its leadership in global tech innovations.

The company’s R&D expenses for 2023 amounted to RMB 19.1 billion, a 19.2% increase from the previous year, highlighting its commitment to innovation.

About Xiaomi Corporation

Xiaomi Corporation was founded in April 2010 and listed on the Hong Kong Stock Exchange in July 2018. With its core in smartphones and smart hardware connected by an IoT platform, Xiaomi aims to create quality products that enhance global living standards through innovative technology.

Introduction to Xiaomi e-commerce platform Youpin

The brand recognition of HarmonyOS has been steadily increasing year by year. From 50% in February 2021, it has risen to 85% in June of this year.

Currently, more than 700 million Harmony ecosystem devices are in use. These devices include smartphones, wearables, car cockpits, smart screens, tablets, smart home, headphones, and more.

In addition, the number of HarmonyOS developers has exceeded 2.2 million, with API calls reaching 59 billion times per day.

Regarding multi-device collaboration, there has been a 32% growth in fitness and health recording, and mobile application downloads have increased by more than 33%.

It is reported that Huawei began planning its proprietary operating system “HarmonyOS” in 2012 and officially released HarmonyOS in August 2019. After several iterations, HarmonyOS has gradually been applied to Huawei products such as smartphones, TVs, watches, and intelligent cockpits.

Huawei’s focus on HarmonyOS is a significant aspect of its strategy to create a complete ecosystem beyond smartphones. By covering various types of devices, such as wearables, car systems, and smart home appliances, HarmonyOS aims to provide a seamless user experience across the spectrum of everyday technologies.

The increase in brand recognition and the vast number of devices operating on HarmonyOS signal a positive trend for Huawei’s ambitions. With a growing developer community and a clear increase in application downloads, Harmony’s ecosystem seems to be maturing.

These achievements are essential for Huawei, particularly as international tensions and restrictions have impacted its operations in several markets. The development and success of HarmonyOS can give the company more control over its technology and reduce its dependence on foreign operating systems.

The latest updates shared during the Huawei Developer Conference 2023 mark a new milestone in the growth of HarmonyOS.

With significant advancements in multi-device collaboration and a surge in the developer community, Harmony is positioning itself as a comprehensive and versatile operating system. The continued expansion of Harmony’s ecosystem will likely play a crucial role in shaping Huawei’s future, strengthening its presence in various technological domains.

Alibaba Cloud unveiled a new in-house processor design for use in its data centers. The server chips, named Yitian 710, are custom-built by Alibaba Group’s chip development business, T-Head.

Powered by these chips, Alibaba Cloud also announced the development of its proprietary servers, called Panjiu.

Alibaba plans to use the chips to support current and future businesses across the Alibaba Group ecosystem. It will also offer its clients next-generation computing services powered by the new chip-powered servers in the near future.

Built upon advanced 5nm process technology, Yitian 710 is powered by 128 Arm cores with 3.2GHz top clock speed to deliver exceptional performance and excellent energy efficiency.

Each processor chip has 60 billion integrated transistors. Yitian 710 is the first server processor that is compatible with the latest Armv9 architecture and includes 8 DDR5 channels and 96-lane PCIe 5.0, providing high memory and I/O bandwidth.

Yitian 710 achieved a score of 440 in SPECint2017 (a standard benchmark to measure CPU integer processing power), surpassing that of the current state-of-the-art Arm server processor by 20% in performance and 50% in energy efficiency.

Panjiu was developed for the next-generation of cloud-native infrastructure. By separating computing from storage, the servers are optimized for both general-purpose and specialized AI computing, as well as high-performance storage.

With a modular design approach for large-scale data center deployment, these servers are expected to deliver exceptional economic value for a wide variety of cloud-native workloads, such as containerized applications and computed optimized workloads.

Alibaba also announced that it will open the source code of the XuanTie IP core series, among other upcoming cores. The XuanTie series is Alibaba’s custom-built processor based on RISC-V instruction-set architecture.

Developers can now access the source code of the XuanTie series IP cores on Github and Open Chip Community to build prototype chips of their own, which can be customized for IoT applications such as networking, gateway and edge servers.

In addition, XuanTie-related software stacks, which support multiple operating systems, including Linux, Android, RTOS, and Alibaba’s own AliOS, will also be opened. Alibaba will provide more services and support for development tools, SDKs and customized cores in the future.

Alibaba released its first AI inference chip Hanguang 800 in 2019. The AI chip has been deployed in Alibaba Cloud’s data centers to power businesses in areas such as search, recommendation and live streaming.

China IoT market forecast 2021-2024; Internet of Vehicles the fastest growing segment

MWC Shanghai 2021 offers an opportunity for delegates and visitors to hear expert insights and future trends, witness the latest technology and innovation, and discuss the issues that will affect the future of the mobile industry.

“MWC21 Shanghai is far more than just an event,” said John Hoffman, CEO, GSMA Ltd. “It’s a celebration of the power of intelligent connectivity and provides a platform for people to come together and push the industry and society forward. Bringing the MWC series of events back for 2021 has taken a superhuman effort, and we are looking forward to welcoming the mobile ecosystem back to Shanghai in February.”

The GSMA unlocks the full power of connectivity so that people, industry, and society thrive. Its MWC series has earned a world-class reputation as the place to get business done by providing unrivaled networking opportunities. In 2019, MWC Shanghai included more than 500 exhibitors and 65,000 attendees from companies across the world.

This year, MWC Shanghai will welcome international attendees and audiences, with a virtual platform to accompany the physical event. Online attendees will be able to access live conference and partner content online.

The theme for the MWC series of events in 2021 is Connected Impact.

The program will showcase how the entire digital ecosystem continues to transform our lives and significantly support global recovery with technology visionaries sparking conversation and imagination through keynotes and panel discussions.

Attendees to MWC Shanghai 2021 will experience the latest breakthroughs in technology including 5G, AI, IoT, smart home and more. Returning exhibitors include China Mobile, China Telecom, China Unicom, CICT, Ericsson , H3C, Huawei, Nokia Shanghai Bell and ZTE.

A host of new 5G-enabled devices and consumer services will be showcased by, Huawei Device, Nreal, Oppo, Qualcomm, Realme and vivo. Confirmed speakers include:

Keynotes speakers:

• Dr Zina Jarrahi Cinker, Director General, AMPT
• Yang Jie, Chairman, China Mobile
• Ke Ruiwen, Chairman, China Telecom
• Ken Hu, Rotating Chairman, Huawei
• Yang Yuanqing, Chairman & CEO, Lenovo
• Xu Chi, Founder & CEO, Nreal
• Xu Ziyang, CEO, ZTE

Session speakers include:

• Ilyas Khan, Founder & CEO, Cambridge Quantum Computing
• Edward Tian, Chairman, CBC Capital
• Oscar Ramos, Managing Director, Chinaccelerator
• Huang Haibo, Managing Director, China Mobile Fund Management Co.Ltd
• Alvin Foo, Co-Founder, Dao Ventures
• Eric Miao, Founder, Elevoc
• Michael Currie, Founder and CEO, Fling
• Jiin Joo Ong, Chief Technology Officer and Co-Founder, Garuda Robotics
• Pedro Ruao, Founder & CEO, Omniflow
• Max Peiro, CEO, Rehub
• Enrique Blanco, CTIO, Telefonica
• Huang Enshen, Founder & CEO, Xeniro

Leading 5G INnovation

With almost 700,000 5G cell sites and over 150 million compatible handsets now sold, China has established itself amongst the global 5G leaders and will feature strongly at MWC Shanghai 2021 with the 5G IN Summit and 5G INnovation Zone.

GSMA 5G IN, seeks to uncover disruptors and new business models, as well as celebrate pioneers and innovators in the 5G field.

The experience spans five themed zones; Better Future, Entrepreneurs, Industrial Applications, 5G mmWave, and XR. Attendees will experience leading-edge technology and revolutionary commercial, industrial applications, as well as the most forward-looking trends and insights.

“5G is shaping the future, and China will continue to be at the forefront of this change,” said Sihan Bo Chen, Head of Greater China for the GSMA. “Every sector is undergoing deep transformation, and connected progress will stimulate global recovery and help us overcome the effects of the pandemic.”

For further details on exhibiting at or attending MWC Shanghai 2021, please visit www.mwcshanghai.com

For Q4 2019, Xiaomi achieved the highest year-over-year growth in smartphone shipments among the top five smartphone companies, according to Canalys.

In December 2019, monthly active users (“MAU”) of MIUI increased by 27.9% year-over-year to 309.6 million. As of December 31, 2019, the number of connected IoT devices (excluding smartphones and laptops) on its IoT platform reached 234.8 million, an increase of 55.6% year-over-year.

Xiaomi’s AI assistant had 60.4 million MAU in December 2019, an increase of 55.7% year-over-year. Xiaomi further expanded its global footprint with overseas revenue growing significantly, accounting for 44.3% of its total revenue in 2019.

Overseas revenue was RMB91.2 billion, an increase of 30.4% year-over-year. As of December 31, 2019, its products were sold in more than 90 countries and regions. According to Canalys, its smartphone shipments ranked the top five in 45 countries and regions in 2019.

In 2019, Xiaomi’s research and development expenses increased by 29.7% year-over-year to RMB7.5 billion. As of December 31, 2019, its total cash resources amounted to RMB66.0 billion.

Xiaomi Smartphone

In 2019, revenue from its smartphone segment reached RMB122.1 billion, an increase of 7.3% year-over-year. In Q4 2019, revenue from its smartphone segment was RMB30.8 billion, an increase of 22.8% year-over-year.

Xiaomi captured over 9% of the global smartphone market share in Feb 2020. Find out more here.

For 2019, Xiaomi shipped approximately 124.6 million units of smartphones, while in Q4 2019, shipments were approximately 32.6 million, an increase of 30.5% year-over-year.

In 2019, its dual-brand strategy showed encouraging results.

The Xiaomi brand focused on pioneering advanced technologies and successfully established a solid foothold in the premium smartphones segment.

The Redmi brand, on the other hand, continued to pursue the ultimate price-performance ratio across different price points and make innovative technologies readily accessible to the mass market.

With the launch of Mi 9 Pro, Mi CC9 Pro and the world’s first smartphone featuring surround display, Mi MIX Alpha, Xiaomi developed strong technological fundamentals in wireless charging, imaging, 5G technology, and next-generation smartphone design and are well poised to capture opportunities brought about by 5G technology in 2020.

In February 2020, Xiaomi launched its flagship 5G smartphone models the Mi 10 and Mi 10 Pro.

According to Canalys, the Redmi Note 7 was the best-selling smartphone model among all models made by Chinese companies in terms of global shipments in 2019.

In December 2019, Redmi launched its first 5G smartphone, the Redmi K30 5G, with pricing starting from RMB1,999, making it the first 5G smartphone priced below RMB2,000. Xiaomi believes the competitive pricing will accelerate the adoption of 5G smartphones by a larger population, enabling more people to enjoy leading technologies.

In 2019, the average selling price of its smartphones increased by 2.2% compared to 2018 and the gross margin of the smartphone segment increased to 7.2% from 6.2% in 2018.

In 2020, Xiaomi will continue to focus on 5G smartphones development and strengthen its presence in the premium smartphones segment, which will lead to further ASP expansion.

IoT and lifestyle products

In 2019, revenue from its IoT and lifestyle products segment was RMB62.1 billion, an increase of 41.7% year-over-year.

In Q4 2019, revenue from its IoT and lifestyle products segment was RMB19.5 billion, an increase of 30.5% year-over-year.

AIoT market in China has reached 380.8 billion yuan in 2019, with an increase of over 47%; check out the forecast for 2020-2022 here.

Xiaomi achieved leading positions in key IoT products that are controlling hubs for its AIoT platform, including TVs, wearable devices and smart speakers.

In 2019, its global TV shipments reached 12.8 million units, an increase of 51.9% year-over-year. In mainland China, its annual smart TV shipments exceeded 10 million units, which Xiaomi believe set an unprecedented record in China’s TV industry.

According to AVC, its TV shipments ranked first in mainland China and fifth globally in 2019. Xiaomi also ranked first in India in terms of smart TV shipments for seven consecutive quarters as of Q4 2019 according to IDC.

According to Canalys, Xiaomi is the world’s largest smart wearable device (including smartwatch and wristband) brand in 2019 by shipments. Xiaomi also ranked the top three in terms of smart speaker shipments in mainland China in 2019 according to IDC. Check out China’s wearable device in 2019.

Xiaomi also continued to expand its product portfolio in key smart home products by launching new products including washing machines and refrigerators.

In 2019, its IoT products won over 50 renowned design awards around the world. Recently, its Mijia Smart Baseboard Heater won the 2020 Red Dot: Best of the Best Award and Mijia Handheld Wireless Vacuum Cleaner won the 2020 iF Design Gold Award.

Xiaomi Internet services

In 2019, revenue from internet services reached RMB19.8 billion, an increase of 24.4% year-over-year. For the fourth quarter, revenue was RMB5.7 billion, an increase of 41.1% year-over-year.

In December 2019, MAU of MIUI increased by 27.9% year-over-year to 309.6 million with mainland China’s MAU of MIUI standing at 109.0 million.

In Q4 2019, advertising revenue was RMB3.0 billion, an increase of 17.8% year-over-year.

The MAU of its news feed service increased by 32.6% year-over-year to 78.7 million in December 2019. This was further bolstered by its efforts in increasing monetization through the optimization of its recommendation algorithms and diversification of its advertising customer base by expanding into more vertical industries.

In Q4 2019, online gaming revenue increased by 44.4% year-over-year to RMB874.4 million, mainly due to the strong performance of many popular games operating on its platform.

Diversification of its internet services has become a key growth driver of its internet services revenue.

In Q4 2019, its internet services revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 112.6% year-over-year and accounted for 43.0% of its total internet services revenue.

In 2019, the GMV of its Youpin e-commerce business grew rapidly, with annual GMV surpassing RMB10.0 billion. During the year, Xiaomi has enlarged its merchandise portfolio, insisted on selecting high-quality goods that appeal to its customers and increased its efforts in new customer acquisition.

As a result, the number of active buyers on Youpin showed strong growth momentum.

In Q4 2019, its fintech business delivered strong revenue growth, mainly driven by the growth in its consumer finance business. In January 2020, Xiaomi Finance successfully obtained a consumer-financing license from the China Banking and Insurance Regulatory Commission.

Xiaomi will continue to strengthen risk controls and strictly follow regulatory rules to maintain the healthy growth of its fintech business.

In Q4 2019, its TV internet services grew quickly primarily driven by the growth of its subscription business. In December 2019, MAU of its smart TVs and Mi Box were approximately 27.7 million, an increase of 49.1% year-over-year.

As of December 31, 2019, Xiaomi had 3.7 million paying subscribers, an increase of 62.9% year-over-year. Lastly, its overseas internet services business also witnessed rapid growth.

In India, 10 of its mobile apps recorded MAU of over 50 million in December 2019, including its Mi Browser, Mi Video and GetApps (an overseas version of Mi App Store).

Overseas markets

In 2019, overseas revenue was RMB91.2 billion, an increase of 30.4% year-over-year.

In Q4 2019, overseas revenue increased by 40.7% year-over-year to RMB26.4 billion, accounting for 46.8% of total revenue for the period. In Q4 2019, Xiaomi was the largest smartphone brand in India by shipments for the tenth consecutive quarter, capturing a market share of approximately 28.7%, according to IDC.

In Western Europe, Xiaomi continued to expand its market share.

According to Canalys, its smartphone shipments in the region grew 115.4% year-over-year in Q4 2019. In Spain, Xiaomi was the second-largest smartphone maker by shipments, achieving 65.7% year-over-year growth with a 22.8% market share.

Xiaomi ranked fourth in both France and Italy, with its smartphone shipments increasing by 69.9% and 206.2% year-over-year, respectively.

In 2019, its overseas IoT revenue grew rapidly, driven by the robust sales of its best-selling IoT products in overseas markets, including its smart TVs, wristbands, TWS earphones, and electric scooters.

In 2020, Xiaomi plans to step up its efforts in promoting its popular IoT products to more countries and regions.

Impact of the COVID-19 outbreak

In terms of the supply chain, Xiaomi experienced a temporary disruption in production in February and March 2020, due to the extended shutdown of Chinese factories.

However, its production capacity has recovered to 80%–90% of normal levels as of the date of this announcement. For its mainland China market, during the peak of the outbreak, its offline sales were affected as most of its stores were closed or operated at shortened hours with significantly lower customer traffic.

However, Xiaomi was comparatively less impacted due to its strength in online channels.

Xiaomi has seen smartphone shipments rebounding quickly in late March 2020, showing the resilience of smartphone demand.

For its overseas market, given that the epidemic is still affecting countries and regions around the world as of the date of this announcement, Xiaomi is closely monitoring and assessing its impact, which will likely defer the overall consumption in the affected countries.

While its overseas demand will undoubtedly be affected, particularly in the second quarter of 2020, Xiaomi believes the overall impact is currently manageable.

Investments

As of December 31, 2019, Xiaomi had invested in more than 290 companies with an aggregated book value of approximately RMB30.0 billion.

Xiaomi expanded its investment into supply chain companies to strengthen its partnership with key component suppliers, enhance its sourcing and manufacturing abilities in advanced technology and facilitate the development of the industries, in particular around 5G, IoT, AI, integrated circuits, advanced manufacturing, and industrial internet.

An increasing number of its investee companies have gone public.

In February 2020, Roborock, one of its investee companies, was successfully listed on the Science and Technology Innovation Board of Shanghai Stock Exchange (“STAR Market”) in China, becoming its first ecosystem investee company to list on the STAR Market.

In Q4 2019, net gains on disposal of investments (after tax) were RMB869.0 million.

The GSMA MWC series (formally known as Mobile World Congress) is the world’s largest exhibition for the mobile industry and incorporates a thought-leadership conference featuring prominent executives representing global mobile operators, device manufacturers, technology providers, vendors, and content owners.

MWC Barcelona 2020 takes place Monday, 24 February – Thursday, 27 February, 2020. The 2020 event will be held at Fira Gran Via with selected events, including 4YFN, taking place at Fira Montjuïc.

Sort through the event topics in our agenda to find the conference keynotes, track sessions, partner events, tours, and seminars that are most relevant to you. Here is an overview of the topics:

AI

With a market projected to reach $70 billion by 2020, artificial intelligence is poised to have a transformative effect on consumers, enterprises, and governments around the world. AI will explore the real potential of AI, how we must manage such a profound technological revolution and its impact on our professional and personal lives.

Connectivity: The 5G Era – Sponsored by Deloitte

Connectivity: The 5G Era at MWC 2020 aims to highlight how next-generation networks will form the basis of wide-reaching value creation and economic impact. We will take a broad look at the enterprise connectivity ecosystem, from implementation, to use cases, scalable platforms, business models, spectrum, regulation, and investment to the business and cultural challenges of working with new and diverse markets/industries. Realising the full potential of global connectivity is both complex and challenging, but the opportunity is near limitless in its application and impact.

Customer Engagement

Customer engagement has been a key battleground for brands, service providers and governments for decades, but its evolution and importance have accelerated in recent years driven by the internet, mobile and then smartphones. Customer Engagement will look at examples across all industries, to understand how you can set the benchmark for customer engagement, retain and gain customers and grow revenue.

Industry X: IoT – Sponsored by Citi

Using a blend of new technologies like industrial IoT, big data, analytics, AI, robotics, 3D printing, and machine learning, industries can unlock new revenue and engagement models with customers, employees and partners. Industry X: IoT will examine the challenges, opportunities, scalability and limitless potential of Industrial IoT and Digital Transformation.

Media & Entertainment

As the appetite and expectation for AR, VR and other forms of richer immersive content grow, the impact on networks, event venues, and overall consumer engagement will grow, presenting huge challenges to everyone involved in these now intertwined industries. Media & Entertainment examines the challenges, the revenue models, as well as the relationship between consumption growth and network capacity.

Our Planet

The world needs, now more than ever, our sector to be a fundamental contributor to creating a safe, clean and equitable world for all. Our Planet will discuss the connected technology industries’ responsibilities to the environment and underserved people, including the unconnected and accessibility for the disabled, among others.

Security & Privacy

Recent scandals have eroded trust in the digital ecosystem. Coupled with the growing introduction and interest in legislation around privacy and the ethics of data usage as we enter the AI era, we are at a pivotal juncture in the evolution of the Internet. Security & Privacy analyses the growing responsibilities required to create the right balance with consumers, governments, regulators and industries.

Find out more: MWC Barcelona

Xiaomi Financial Results

In Q3 2019, Xiaomi achieved RMB53.7 billion in total revenue, representing an increase of 5.5% YoY. Gross profit increased to RMB8.2 billion, representing a year-over-year increase of 25.2%. Adjusted net profit increased by 20.3% year-over-year to RMB3.5 billion. As of September 30, 2019, Xiaomi’s total cash resources amounted to RMB56.6 billion.

In Q3 2019, Xiaomi continued to execute Xiaomi’s “Smartphone + AIoT” dual-engine strategy and it yielded positive results. Xiaomi’s user base and the number of devices connected to Xiaomi’s platform have continued to grow robustly.

In September 2019, monthly active users (“MAU”) of MIUI reached 291.6 million, representing an increase of 29.9% over the corresponding period in the previous year.

The number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached 213.2 million as of September 30, 2019, representing year-over-year growth of 62.0%. Meanwhile, Xiaomi’s AI assistant had 57.9 million MAU in September 2019, representing a year-over-year increase of 68.6%.

Xiaomi’s products were well received by consumers during the Double 11 Singles’ Day shopping festival in China. Xiaomi’s total payment for sales across all platforms and channels surpassed RMB6.1 billion in China.

Xiaomi’s flagship store on the Tmall platform achieved a total payment for sales of more than RMB2.1 billion, ranking 1st among all brand flagship stores on Tmall for the 7th consecutive year since Xiaomi first participated in the Singles’ Day shopping festival in 2013.

In October 2019, Xiaomi made its debut on the Fortune Future 50 list, ranking 7th, and was the second-highest ranked among all Chinese companies on the list. Furthermore, Xiaomi ranked 57th on Forbes’ Top 100 Digital Companies List.

Xiaomi Smartphones

Xiaomi’s smartphone segment recorded RMB32.3 billion in revenue in Q3 2019. Xiaomi’s smartphone sales volume in Q3 2019 reached 32.1 million units. According to Canalys, Xiaomi ranked 4th globally in terms of smartphone shipments in the third quarter of 2019, with a market share of 9.2%.

Following the introduction of Mi MIX 3 5G in Europe in February 2019, Xiaomi launched Xiaomi’s first 5G smartphone in China, Mi 9 Pro 5G, in September 2019, marking another milestone in its 5G technology development. Mi 9 Pro 5G was well received by the market.

In 2020, Xiaomi expects to launch ten or more 5G smartphone models to capture the 5G smartphone replacement cycle, starting from China.

In Q3 2019 , Xiaomi continued to advance technologically and create breakthroughs. In September 2019, Xiaomi released Xiaomi’s 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 Xiaomi’s continuous efforts in exploring cutting-edge technology. Xiaomi introduced Mi CC9 Pro in November 2019, which is the first mass-produced smartphone to carry a 108MP penta-camera.

It is also capable of up to 10x hybrid zoom and up to 50x digital zoom. Mi CC9 Pro Premium Edition achieved a DXOMARK score of 121 for overall camera performance, ranking 1st globally at the time of launch. It also achieved a DXOMARK score of 102 in the video category, the highest among all smartphones at the time of launch. Xiaomi also released an overseas version of this smartphone, Mi Note 10, in Spain in November 2019.

According to Canalys, Redmi Note 7 was the best-selling smartphone model among all models made by Chinese companies in terms of global shipments in Q3 2019. Xiaomi launched Redmi Note 8 and Redmi Note 8 Pro in August 2019, Redmi 8A and Redmi K20 Pro Premium Edition in September 2019, and Redmi 8 in October 2019.

The average selling price (“ASP”) of Xiaomi’s smartphones in mainland China continued to increase in Q3 2019, achieving year-over-year growth of 4.6%. The ASP of Xiaomi smartphones in overseas markets recorded a quarter-over-quarter increase of 7.8% and a year-over-year decrease of 4.1% in Q3 2019. The decrease was primarily due to a different product mix compared to the third quarter of 2018.

The gross profit margin of Xiaomi’s smartphone segment further increased from 8.1% in the second quarter of 2019 to 9.0% in Q3 2019.

Xiaomi IoT and lifestyle products

In Q3 2019, the revenue of Xiaomi’s IoT and lifestyle products segment rose by 44.4% year-over-year to RMB15.6 billion.

Xiaomi’s smart TV business maintained its leading edge in both mainland China and overseas markets. In Q3 2019, global shipments of Xiaomi smart TVs reached 3.1 million units, representing a year-over-year growth of 59.8%.

According to All View Cloud (“AVC”), Xiaomi ranked 1st in terms of TV shipments in mainland China in Q3 2019, with a market share of 16.9%. With Xiaomi’s consistent efforts to expand Xiaomi smart TV business globally, Xiaomi ranked top five in terms of global TV shipments in Q3 2019 according to AVC.

Xiaomi further expanded Xiaomi’s product offering in the high-end segment and launched Mi TV 5 and Mi TV 5 Pro in November 2019. Mi TV 5 Pro utilizes a 4K quantum dot display panel that covers a 108% NTSC wide color gamut and comes with HDR10+ support and built-in MEMC technology, enabling a premium picture quality.

Xiaomi has positioned large home appliances as strategic components of Xiaomi’s AIoT strategy. Focused on cutting-edge innovation, superior design and interactive experiences, Xiaomi is dedicated to enhancing the connectivity and compatibility of the whole suite of Xiaomi’s smart home appliances.

Following the successful launch of Xiaomi’s air conditioners and washing machines, Xiaomi launched Mi Refrigerator in October 2019, further expanding Xiaomi’s spectrum of products in the large home appliances category.

In October 2019, Redmi introduced the RedmiBook 14 Ryzen Edition and Xiaomi introduced Mi Laptop 15 Pro, both of which enjoyed widespread popularity.

Following the success of Xiaomi’s Mi Band, Xiaomi launched Xiaomi’s new wearable product, Mi Watch, in November 2019. Equipped with an independent eSIM and supported by MIUI For Watch, Mi Watch is dedicated to bringing Xiaomi’s customers the ultimate user experience in both hardware and software.

Many of Xiaomi’s IoT products have been well received by the market. For example, according to AVC, for the nine months ended September 30, 2019, Xiaomi’s fresh air ventilator was the top fresh air ventilator in mainland China in terms of several measurement aspects, including online brand sales, online single-product sales volume and value, while Xiaomi’s Mi Water Purifier ranked top two in terms of online sales value.

Xiaomi’s AIoT products won multiple domestic and international awards. Xiaomi’s Mi AI Touchscreen Speaker won multiple design awards, including the International Design Excellence Award (IDEA), the Red Dot Design Award, and the Good Design Award.

Meanwhile, Xiaomi’s Mi Router Mesh received a 5-star recommendation in the China Mobile 2019 Smart Hardware Quality Report, and Xiaomi’s Mi Electric Scooter Pro won the Expert Imaging and Sound Association’s Best Product (Electric Vehicle) Award.

Xiaomi Internet services

In Q3 2019, Xiaomi’s user base continued to expand. The MAU of MIUI increased by 29.9% year-over-year to 291.6 million in September 2019. Xiaomi’s mainland China MAU of MIUI remained flat year-over-year in September 2019 at 112.8 million.

The MAU of Xiaomi’s smart TVs and Mi Box achieved 50.1% year-over-year growth, reaching 23.9 million in September 2019.

Revenue from Xiaomi’s internet services segment grew by 12.3% year-over-year to RMB5.3 billion in Q3 2019. Advertising revenue decreased by 9.0% year-over-year to RMB2.9 billion, which was mainly due to pre-installation revenue decreasing to RMB376.6 million from RMB825.4 million YoY. This decrease partly reflected a shift in advertiser preference for non-pre-installation advertising. Excluding preinstallation revenue, advertising revenue grew 6.9% year-over-year in Q3 2019.

In Q3 2019, Xiaomi continued to diversify Xiaomi’s advertiser base by expanding into more vertical industries, including financial services and small- and medium-sized enterprises, to develop a more robust and healthier advertising business.

Revenue from gaming increased by 26.0% year-over-year to RMB822.3 million in Q3 2019. Xiaomi’s other internet value-added services grew by 78.2% year-over-year to RMB1.6 billion, primarily as a result of the strong growth in revenue of Xiaomi’s fintech business and Youpin e-commerce platform.

In Q3 2019, Xiaomi launched MIUI 11, featuring a minimalistic design with efficient office and smart travel application suites. Combining the improvements in efficiency with the new optimized modern user interface design, MIUI 11 provides an all-rounded upgrade to Xiaomi’s users.

With Xiaomi’s continuous efforts to diversify Xiaomi’s internet services business, Xiaomi’s internet services revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 87.8% year-over-year and accounted for 37.2% of Xiaomi total internet services revenue in Q3 2019 .

In Q3 2019, the gross merchandise volume of Xiaomi’s Youpin e-commerce platform maintained a strong year-over-year growth primarily due to the expansion of Xiaomi’s product categories on the platform and the continued growth and diversification of Xiaomi’s user base.

In Q3 2019, the revenue from Xiaomi’s fintech business increased by 91.2% year-over-year to RMB1.0 billion. The increase was mainly due to the strong growth achieved in Xiaomi consumer loan business.

In Q3 2019, Xiaomi’s revenue from TV internet services continued to grow, driven by the increase in both subscription revenue and advertising revenue. In September 2019, the MAU of Xiaomi’s smart TVs and Mi Box reached 23.9 million, representing a year-over-year increase of 50.1%.

As of September 30, 2019, Xiaomi had more than 3.2 million paid subscribers, representing year-over-year growth of 68.8%.

Xiaomi’s AIoT Strategy

In Q3 2019, Xiaomi continued to execute Xiaomi’s “Smartphone + AIoT” dual-engine strategy and maintained Xiaomi’s leading position.

As of September 30, 2019, the number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached approximately 213.2 million, representing a year-over-year increase of 62.0%.

The number of users who have five or more devices connected to Xiaomi’s IoT platform (excluding smartphones and laptops) increased to 3.5 million, representing a year-over-year increase of 78.7%.

In September 2019, Xiaomi’s AI assistant had 57.9 million MAU with a year-over-year increase of 68.6% and continued to be one of the most used AI voice interactive platforms in mainland China. Meanwhile, Xiaomi’s Mi Home app had 32.1 million MAU in September 2019, with 63.0% of these active users being non-Xiaomi smartphone users.

Xiaomi continued to strengthen the connectivity across devices on Xiaomi’s AIoT platform. Xiaomi smartphones, smart TVs, AI speakers, and smartwatches can all act as controlling hubs for Xiaomi’s AIoT platform.

Xiaomi’s monthly active users (“MAU”) of MIUI reached 278.7 million, an increase of 34.7% YoY. AI assistant “ Xiao’ai ” had 49.9 million MAU; Xiaomi ranked 4th globally in terms of smartphone shipments; and, global shipments of its smart TVs reached 2.7 million units.

Xiaomi financial performance

In the second quarter of 2019, Xiaomi recorded RMB52.0 billion in revenue, representing an increase of 14.8% over the corresponding period of 2018. Gross profit margin increased to 14.0% from the 12.5% achieved in the corresponding period of 2018. Adjusted Net Profit increased by 71.7% to RMB3.6 billion. As of June 30, 2019, its total cash resources amounted to RMB51.1 billion.

The “Smartphone + AIoT” dual-engine strategy that Xiaomi adopted at the beginning of the year has borne fruit. Its user base has continued to expand and the number of devices connected to its platform has continued to grow.

In June, 2019, monthly active users (“MAU”) of MIUI reached 278.7 million, an increase of 34.7% over the corresponding period of 2018. The number of connected IoT devices (excluding smartphones and laptops) on its IoT platform reached approximately 196 million units as of June 30, 2019, representing year-over-year growth of 69.5%.

Meanwhile, its AI assistant “ Xiao’ai ” had 49.9 million MAU in June 2019, representing a year-over-year increase of 88.3%.

Xiaomi has won a number of international recognitions in 2019 to date. It took Xiaomi only 9 years to debut on the Fortune Global 500 list of 2019, becoming the youngest company on the list this year. Furthermore, Xiaomi made it into the 2019 BrandZ Top 100 Most Valuable Global Brands ranking for the first time, ranking 74th with a brand value of US$19.8 billion. Xiaomi has also been recognized as one of the 2019 Forbes China’s 50 Most Innovative Companies.

Xiaomi Smartphones

Its smartphone segment recorded RMB32.0 billion in revenue in the second quarter of 2019, representing an increase of 5.0% over the corresponding period of 2018. Its smartphone sales volume in the second quarter of 2019 reached 32.1 million units.

According to Canalys, Xiaomi ranked 4th globally in terms of smartphone shipments during the second quarter of 2019 and its market share in terms of global smartphone shipments increased from 9.5% in the second quarter of 2018 to 9.7% in Q2 2019.

Both its Xiaomi brand, which focuses on pioneering advanced technologies, establishing itself in the mid- to high-end markets, and building online and offline new retail channels, and its Redmi brand, which is positioned to pursue the ultimate price-performance ratio and focus on online channels have performed well.

After the launch of the new flagship model K20 series under the Redmi brand, Xiaomi has established a comprehensive Redmi smartphone product portfolio that covers a wide price range. In particular, the global sales volume of the Redmi Note 7 series reached 20 million units as of the date of this announcement, achieving this milestone in only around 7 months since its launch on January 10, 2019.

In addition, the global shipments of the K20 series already recorded more than 1 million units within the first month of its launch.

On July 2, 2019, Xiaomi launched the CC series under the Xiaomi brand, which includes Mi CC9, Mi CCe9, and Mi CC9 Meitu Edition. The CC series is positioned as a fashionable series targeting younger customers. The CC series places an emphasis on being visually appealing in terms of both form and function, offering stylish product design and enhanced photography experience.

Mi CC9 Meitu Edition is a joint development with Meitu Inc. which specifically targets the female user market. Leveraging its product development and supply chain management capabilities, as well as Meitu’s image-related algorithms and its deep understanding of female users, the Mi CC9 Meitu Edition offers outstanding photographic experiences and builds a solid foundation for its ongoing expansion into more diversified user markets.

Its products have been strongly recognized by the market as a result of the successful implementation of its multi-brand strategy. The average selling price (“ASP”) of its smartphones has continued to increase, achieving year-over-year growths of 13.3% and 6.7% in mainland China and overseas markets, respectively. In Q2 2019, the revenue generated by smartphones sold for RMB2,000 or more accounted for 32.3% of the total revenue of the smartphones segment.

Following the granting of 5G business licenses in mainland China, 5G technology has officially started to be implemented for commercial use. The commercialization of 5G technology could potentially lead to a new smartphone replacement cycle and boost the overall demand of the domestic market.

Xiaomi established a research and development team back in 2016 for advanced research on 5G technology and are now well-prepared for the commercialization of 5G. The Mi MIX 3 5G, its first 5G model was already available in various European countries, and its second 5G smartphone model will also be launched in China in the second half of the year.

The gross profit margin of its smartphone segment increased from 3.3% in the first quarter of 2019 to 8.1% in Q2 2019. During the early transition period from 4G to 5G technology, Xiaomi will continue to invest in research and development of relevant technologies while remaining prudent with its cash flows and profitability.

IoT and lifestyle products

In Q2 2019, the revenue of the IoT and lifestyle products segment rose by 44.0% to RMB14.9 billion over the corresponding period of 2018. Its smart TV business continues to have a leading edge in both mainland China and overseas markets.

Global shipments of its smart TVs reached 2.7 million units, representing year-over-year growth of 41.1%. According to AVC, Xiaomi ranked 1st in terms of TV shipments in mainland China for the six months ended June 30, 2019.

Xiaomi ranked 1st in terms of smart TV shipments in India for five consecutive quarters as of the second quarter of 2019. With its efforts in expanding its smart TVs globally, Xiaomi achieved a top 5 position in terms of global TV shipments for the six months ended June 30, 2019, according to AVC.

Xiaomi has positioned large home appliances as an important element of its AIoT strategy. Xiaomi will focus on innovation and product design, offering intelligent user experiences and promoting the enhanced connectivity and compatibility of its smart home appliances.

For the six months ended June 30, 2019, the shipments of its air conditioners amounted to approximately 1 million units. At the same time, Xiaomi has also entered the smart kitchen appliances market.

In Q2 2019, Xiaomi continued to enrich its IoT product portfolio. The market share of its laptops has been steadily increasing following the launch of its new products. On May 28, 2019, the Redmi brand introduced its first 14” slim notebook and enjoyed widespread popularity.

According to IDC Consulting (Beijing), the market share of its laptops in mainland China in terms of shipments increased from 5.5% in the second quarter of 2018 to 8.7% in Q2 2019. Its Mi Band ranked 1st in the global wearables market in terms of shipments in the first quarter of 2019.

Meanwhile, the Mi Band 4 recorded shipments of more than 1 million units within 8 days of its launch on June 14, 2019. In addition, Xiaomi has also launched several new products, including its AI Translator “Xiao’Ai Teacher”, Mi Smart Door Lock and Mi Smart Combo Wash and Dryer Pro, which are supported by its AI assistant “Xiao’Ai”. These product launches illustrated its continuous
the pursuit of excellent product design and quality.

Xiaomi has continued to improve the device-to-device interaction and enhance its users’ smart home experience. For example, when a user opens the door through a Mi Smart Door Lock, its
AI assistant will welcome him/her home. At the same time, the Mi Air Purifier, Mi Air Conditioner, and other smart devices could be switched on automatically. The Mi Smart Combo Wash Dryer Pro can be operated by the voice control function through its AI assistant

Xiaomi Internet services

In the second quarter of 2019, its user base continued to expand. The MAU of MIUI rose by 34.7% year-over-year from 206.9 million in June 2018 to 278.7 million in June 2019. The MAU of MIUI in mainland China was 115.1 million in June 2019. The MAU of its smart TVs and Mi Box achieved 53.8% year-over-year growth, reaching 22.6 million in June 2019.

Revenue from its internet services segment grew by 15.7% year-over-year to RMB4.6 billion in Q2 2019. Advertising revenue slightly decreased by 0.6% year-over-year to RMB2.5 billion due to a soft mainland China advertising market, particularly due to reduced advertising spending from other internet companies which contributed a meaningful portion of its advertising revenue.

Over the course of the last few quarters, Xiaomi has continued executing its strategy to diversify its advertising customer base. Through expanding into more vertical industries, such as finance and small and medium-sized enterprises, Xiaomi is developing a more robust and healthy advertising business to capture more future growth.

Revenue from gaming decreased by 4.1% year-over-year to RMB675.1 million. However, its gaming gross profit increased to RMB408.2 million in Q2 2019 from RMB212.5 million in Q2 2018, representing an increase of 92.1%. Its gaming gross profit margin increased from 30.2% in Q2 2018 to 60.5% in Q2 2019 as Xiaomi optimized its gaming distribution and had higher gaming revenue growth from content providers with a high gross profit margin. Its other internet value-added services grew by 89.9% year-over-year to RMB1.4 billion, primarily due to the strong growth in revenue from its fintech business and Youpin e-commerce platform.

Introduction to Xiaomi’s e-commerce platform Youpin

Xiaomi has been focusing on enriching its internet services and content to strengthen its advertising business. Many of its internet services are leading on its smartphones, its Mi App Store, Mi Browser, Mi Security, and Mi Music ranked 1st and Mi Video ranked 2nd in their respective categories in mainland China in terms of MAU on its smartphones in June 2019.

Furthermore, its news feed service ranked 1st in terms of MAU on its smartphones in mainland China, reaching 71.0 million MAU in June 2019, representing a year-over-year increase of 31.0%. Its search service also ranked 1st on its smartphones in mainland China in terms of search query volume in the second quarter of 2019.

Xiaomi developed various entry points for its search function, including browser, negative one screen, launcher searchbox, and its AI assistant. Leveraging its increasingly diversified services and
multi-dimensional data, Xiaomi is able to further improve its algorithm and enhance its users’ experience. Services like news feed and search allow Xiaomi to diversify its advertising customer base.

Internet service revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 108.8% over the corresponding quarter in 2018, accounting for 36.0% of the total internet service revenue in the second quarter of 2019.

For the six months ended June 30, 2019, the gross merchandise volume (“GMV”) of its Youpin e-commerce platform grew to RMB3.8 billion, an increase of 113.9% YoY. In June 2019, more than 65% of Youpin’s GMV came from non-Xiaomi smartphone users.

Revenue from its fintech business increased to RMB792.0 million in Q2 2019, representing year-over-year growth of 62.7%. Its current fintech business focuses on consumer loans and supply chain financing. With its sophisticated risk management model and technology capability, and extensive user base and supply chain partners, Xiaomi had a solid business foundation and potential to grow. In the meanwhile, Xiaomi is also actively exploring other fintech business opportunities.

Its TV internet services are also fast-growing and increasingly diversified. TV internet services revenue is mainly generated from advertising, paid subscription, and app distribution. In June 2019, Xiaomi had over 3 million paid subscribers, representing a year-over-year increase of 83.1%. Xiaomi offers a variety of membership services, including video membership, sports memberships, and children membership. Its subscription services have expanded to other non- Xiaomi TVs to serve a wider user base.

Xiaomi’s Overseas markets

With the overseas expansion of its smartphone business, its overseas internet service revenue also increased significantly. Xiaomi continued to build and strengthen its service offerings in overseas markets. In June 2019, its browser ranked 1st among all browsers in India in terms of MAU on its smartphones. In the second quarter of 2019, the average revenue per user (“ARPU”) in overseas markets recorded a year-over-year increase of 133.0%.

Xiaomi has maintained strong growth in the overseas markets in the second quarter of 2019. Its revenue from the overseas markets grew 33.1% year-over-year to RMB21.9 billion in the second quarter of 2019.

Xiaomi will continue to build and expand its new retail channels in the overseas markets. As of June 30, 2019, there were a total of 520 Mi Home stores overseas, representing a 92.6% year-over-year growth, of which 79 stores were located in India. Furthermore, in India, Xiaomi had more than 1,790 Mi Stores that cater to tier two and rural areas of India as of June 30, 2019.

According to Canalys, in the second quarter of 2019, Xiaomi ranked among the top five in over 40 countries and regions in terms of smartphone shipments. According to IDC, its smartphones have ranked 1st in India in terms of shipments for eight consecutive quarters. In addition, according to Canalys, in Q2 2019, Xiaomi ranked 4th in terms of smartphone shipments for Western Europe, representing a year-over-year increase of 53.2%.

Xiaomi ranked 2nd in open market channels in Spain in terms of smartphone shipments in Q2 2019. Xiaomi has been developing operator channels in Europe. Its flagship smartphones, such as Mi MIX 3 and Mi 9 series, have been launched in operator channels in the United Kingdom, France, Spain, Italy, and Switzerland.

AIoT

In Q2 2019, Xiaomi continued the implementation of its “Smartphone + AIoT” dual-engine strategy and its AIoT platform continued to maintain its leading position. As of June 30, 2019, the number of connected IoT devices (excluding smartphones and laptops) on its IoT platform reached approximately 196 million units, representing a year-over-year increase of 69.5%.

The number of users who have five or more devices connected to Xiaomi’s IoT platform (excluding smartphones and laptops) increased to approximate 3 million, representing a year-over-year increase of 78.7%. In the six months ended June 30, 2019, the shipments of its AI speakers exceeded 4 million units.

In June 2019, its AI assistant had 49.9 million MAU, making it one of the most used AI voice interactive platforms in China. In June 2019, 45% of its AI speaker MAU used voice control to interact with their IoT devices at least once that month.

Xiaomi continued to open up its AIoT platform to build a more vibrant AIoT ecosystem. Its Mi Home app had 30.4 million MAU in the second quarter of 2019 and more than half of the MAU in mainland China were from non-Xiaomi smartphone users. Xiaomi will continue to invest in the development of its open AIoT platform to attract more third parties and users to join this AIoT platform.

The Group’s AIoT Strategy committee will further enhance the development of its AIoT technology, by building a comprehensive AIoT ecosystem, strengthening its research and development, and realizing synergies across business units to improve its smart devices’ connectivity and user experiences.

For example, Xiaomi continues to develop technologies for files to be seamlessly transferred between its smartphones and laptops, as well as for intelligent projection to be enabled between its smartphones and smart TVs.

Xiaomi’s Investments

As of June 30, 2019, Xiaomi invested in a total of over 270 companies with an aggregated book value of RMB28.7 billion, representing year-over-year growth of 20.8%. Xiaomi also expanded its investment into supply chain companies to strengthen its partnership with key component suppliers and to enhance its abilities in advanced technology sourcing and manufacturing.

As of the date of this announcement, Xiaomi invested in 12 supply chain companies. Among those, three of the investee companies were listed on the STAR Market in China. Xiaomi believes its investments not only allowed Xiaomi to establish close partnerships with the investee companies but also provided Xiaomi with recurring investment income.

In the second quarter of 2019, Xiaomi generated net gains on disposal of investments (after tax) of RMB551.8 million.

In the first quarter of 2019, Xiaomi recorded RMB43.8 billion in revenue, representing an increase of 27.2% over the corresponding period of 2018. Profit for Q1 2019 grew to RMB3.2 billion and Adjusted Net Profit grew 22.4% year-on-year to RMB2.1 billion.

Xiaomi continued to focus on their “Smartphone + AIoT” dual-engine strategy and greatly expanded the number of devices connected to its platform.

As of March 2019, monthly active users (“MAU”) of MIUI reached 260.9 million, representing a year-on-year increase of 37.3%. The number of connected IoT devices (excluding smartphones and laptops) on Xiaomi IoT platform has reached approximately 171.0 million units, representing year-on-year growth of 70.0%.

Xiaomi AI assistant “Xiao Ai Tongxue” had over 45.5 million MAU in March 2019, representing a year-on-year increase of 247.2%.

Xiaomi Smartphones

Xiaomi smartphone segment recorded approximately RMB27.0 billion in revenue in Q1 2019, representing an increase of 16.2% over the corresponding period of 2018. Its smartphone sales volume in Q1 2019 reached 27.9 million units.

According to Canalys, Xiaomi ranked 4th globally in terms of the volume of smartphone shipments during the Q1 2019.

In Q1 2019, Xiaomi released several smartphone models under each brand, including Mi 9, Mi 9 SE, Redmi Note 7, Redmi Note 7 Pro and Redmi 7. The market response was positive with regard to the respective product launches.

In particular, Redmi Note 7, which was released on January 10, 2019, and launched in overseas markets on February 28, 2019, was in high demand. The shipments of its Redmi Note 7 series exceeded 4 million units in Q1 2019.

In addition, its new flagship model Mi 9 series, which was released on February 20, 2019, and launched in overseas markets shortly thereafter, has also been very popular to date. The Mi 9 is powered by the Snapdragon 855 processor, equipped with an ultra-wide-angle AI triple camera with the main camera using a 48-megapixel Sony sensor, and has an all-curved holographic back design.

The Mi 9 is also the world’s first smartphone to feature 20W wireless quick charging. As of March 31, 2019, the supply of Mi 9 series smartphones surpassed 1.5 million units while the sales volume of Mi 9 series smartphones exceeded 1.5 million shortly thereafter in early April 2019.

Xiaomi’s smartphone market share in mainland China increased for three consecutive months throughout the first quarter of 2019, from 9.5% in January 2019 to 11.8% in March 2019.

Moreover, due to the continuous optimization of Xiaomi’s product portfolio, the average sales price (“ASP”) of its smartphones in mainland China and in overseas markets achieved year-on-year growth of 29.9% and 12.1%, respectively, in Q1 2019.

Xiaomi IoT and lifestyle products

During Q1 2019, the revenue of the IoT and lifestyle products segment rose by 56.5% to RMB12.0 billion over Q1 2018, maintaining a rapid growth rate.

Xiaomi’s smart TVs continued to lead the way, ranking 1st in terms of shipments for two consecutive quarters in mainland China. As of March 31, 2019, global shipments of Xiaomi’s smart TVs reached 2.6 million units, representing a nearly two-fold year-on-year growth of 99.8%.

Xiaomi has also recently launched a variety of large home appliances. In April 2019, it released Mi Mural TV, Mi LED TV 4 Pro and Mi Internet Vertical Air Conditioner C1, all of which have been perceived positively by the market.

Mi Mural TV is its first smart TV that uses far-field microphone technology, enabling users to activate voice control features even at a distance. Users can switch on their smart TVs, search for movies, check the weather, and control other smart home products without the need of a mic-enabled remote control.

Xiaomi’s smart TVs can also display smart device notifications and act as control hubs for compatible smart home products.

During Q1 2019, Xiaomi’s ecosystem products, such as Mi Band, Mi Air Purifier and Mi Electric Scooter, continued to enjoy wide popularity and achieved robust sales growth.

Xiaomi also launched a variety of other popular products this year, such as Mi Smart Door Lock, Mi Wireless Power Bank, Mi Photo Printer, Mi Wireless Car Charger, and Mi AirDots.

Xiaomi’s Redmi brand also launched various IoT and lifestyle products, such as Redmi AirDots. The designs of Xiaomi’s IoT products have continued to receive significant market recognition.

In Q1 2019, Xiaomi won 25 international design awards. For example, Xiaomi’s Mi Washing Machine was awarded the iF Design Award and Xiaomi’s Mi Smart Door Lock was awarded the Red Dot Award.

Xiaomi Internet Services

Revenue from Xiaomi’s internet services segment grew 31.8% year-on-year to RMB4.3 billion in Q1 2019. Advertising revenue grew 21.8% year-on-year to RMB2.3 billion.

Revenue from gaming grew 6.8% year-on-year to RMB823.1 million. Xiaomi’s other internet value-added services grew 96.4% year-on-year to RMB1.2 billion, primarily due to the rapid growth in revenue from Xiaomi’s internet finance business and Youpin e-commerce platform.

The MAU of MIUI rose 37.3% from 190.0 million in March 2018 to 260.9 million in March 2019. The MAU of MIUI in mainland China also achieved quarter-on-quarter growth. The MAU of Xiaomi’s smart TVs and Mi Boxes achieved 55.1% year-on-year growth, reaching 20.7 million in March 2019.

Xiaomi has continued to diversify Xiaomi’s internet services revenue. Internet services revenue outside of advertising and gaming from China smartphones, including those generated from TV internet services, overseas internet services, Youpin e-commerce, and internet finance business, accounted for 31.8% of the total internet services revenue in Q1 2019, representing year-on-year growth of 167.3%.

Xiaomi’s overseas internet services revenue grew rapidly as they continued to strengthen Xiaomi’s internet services in key markets. For example, we have been actively developing Xiaomi’s internet finance business in India and launched Mi Pay, a payment product, in India in March 2019.