Xiaomi (XIACF) 2024 Q4 Earnings Call Q&A Summary: Smartphone Market, EV Business, and International Expansion

Live Track
18 Mar


Q1: What is your outlook for the smartphone market in 2024, especially given Xiaomi's recent market share gains in China?

A1: (Lu Weibing)
- Overall smartphone market growth in 2024 is expected to be very small, around 1-2%.
- Xiaomi aims to increase shipments from 169 million in 2023 to 180 million in 2024, targeting about 1 percentage point market share gain.
- The focus is on improving product mix and average selling price (ASP) rather than just volume growth.
- Xiaomi maintains its goal of reaching 200 million annual smartphone shipments by 2027.
- In China, the high-end segment is benefiting from government subsidies.
- For Western Europe, Xiaomi has strategically reduced entry-level product sales to focus on mid to high-end devices, which is expected to improve market share and profitability in the future.

Q2: What are your plans for expanding the EV business capacity and launching new models?

A2: (Lu Weibing)
- Xiaomi is significantly ramping up production capacity through various measures:
1. Optimizing existing production lines
2. Working closely with suppliers to ensure supply
3. Potentially adding new production lines
- The production capacity target has been increased from 300,000 to 350,000 units for 2025.
- Capacity will be allocated across all EV models, not just focused on the new SU7.
- The company aims to balance supply between different models to meet diverse customer demand.

Q3: How is Xiaomi expanding its international presence, especially in IoT and retail?

A3: (Lu Weibing)
- IoT business overseas accounts for about 1/3 of total IoT revenue, with significant growth potential as the overseas market is twice the size of the domestic market.
- Xiaomi is expanding its retail presence internationally through:
1. Mi.com online stores in multiple countries
2. Mi Home physical stores, with plans to open in more countries, including Southeast Asia and Europe
- The company aims to open 10,000 Mi Home stores globally in the next five years.
- International expansion of retail channels is expected to boost IoT product sales and support the premium product strategy.

Q4: Can you provide more details on Xiaomi's AI investments and strategy?

A4: (Lu Weibing & Alain Lam)
- AI is a core focus for Xiaomi, alongside IoT and chip development.
- The company is investing heavily in AI, with over 25% of its 30 billion RMB R&D budget allocated to AI in 2025.
- Key AI focus areas include:
1. Building foundational AI infrastructure
2. Developing core AI technologies and large language models
3. Product integration, especially with Xiaomi's "Super Xiao AI" assistant
- Xiaomi aims to leverage its large user base, diverse devices, and extensive data to create unique AI applications across its ecosystem.

Q5: How is the home appliance business performing, and what are the long-term goals?

A5: (Lu Weibing)
- Home appliances, particularly air conditioners, have shown strong growth, with revenue increasing over 50% in 2024.
- Xiaomi aims to become a top 3 air conditioner brand in China by 2025 and top 1-2 by 2030.
- The company is investing in R&D, manufacturing facilities, and expanding its product line to include central air conditioning systems.
- Xiaomi's strengths in smart connectivity and OTA updates give it an advantage in the smart home appliance market.
- The company is also beginning to expand its home appliance business internationally, starting with Southeast Asia.

Q6: Are there any synergies between the smartphone and EV businesses?

A6: (Lu Weibing)
- There are significant synergies between Xiaomi's smartphone and EV businesses:
1. Cross-promotion in retail stores, especially during holiday periods
2. Shared brand appeal and customer base
3. Mutual reinforcement of premium brand image
- For example, the simultaneous launch of Xiaomi 15 and SU7 benefited both product lines, with Xiaomi 15 sales growing 80% compared to the previous generation.
- These synergies are expected to strengthen as Xiaomi's ecosystem expands and matures over the next 3-5 years.

Q7: What is the outlook for Xiaomi's internet services business, especially in overseas markets?

A7: (Lu Weibing & Alain Lam)
- Internet services revenue reached a record high in Q4 2024, driven by:
1. Growing user base
2. Improved user mix due to more premium smartphone sales
3. Increased advertising revenue, especially from pre-installations on high-end devices
- Overseas internet services now account for over 1/3 of total internet services revenue.
- The focus in overseas markets is currently on organic growth through increased device shipments and user base expansion.
- Future growth opportunities in overseas markets include:
1. Expanding beyond advertising to include more diverse revenue streams
2. Potentially introducing successful domestic internet service models to international markets

Disclaimer: This earnings call summary is generated by AI and is for informational purposes only. Due to technical limitations, inaccuracies may exist. It does not constitute investment advice or commitments.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10