Chinese smartphone maker Xiaomi has reported a net profit of $710.6m for the second quarter of 2024, up 38.3% year-on-year. The company also grew its revenues by 32%, with its core smartphones and AIoT (smart devices) segment reporting Q2 sales up 22.5%. The brand also overtook Apple to be the fourth biggest vendor by market share in mainland China in the same period.
Xiaomi was the fastest growing smartphone brand in the world in Q2
The strong financial performance reflects Xiaomi's growing popularity in the global smartphone market, which grew 6% year-on-year in Q2 2024, according to the latest data from IDC and Kantar.
Xiaomi was the fastest growing top five brand in Q2, increasing its shipments by 22% and 27.4%, respectively, according to the two research firms.
Globally it also ranked third in terms of market share, behind Samsung and Apple, with 14.8% and 15.8%, respectively, according to IDC.
Xiaomi's success was driven by sales of the Redmi 13 (R4,000) and Note 13 (R5,000) series, which offered competitive features and prices in the low-end segments.
It expanded its presence in the premium segment, with the launch of its flagship Xiaomi 14 series and its latest generation foldable smartphone, the Mix Fold 4, in China.
The AIoT ecosystem was a big boost to revenues from IoT and lifestyle products, which hit a new record, rising 20.3% from last year.
Samsung the slowest grower
Meanwhile, Samsung, the global smartphone leader, saw a modest growth of 0.7% in its shipments, according to IDC, and a slight decline of 2% in its sales volumes, according to Kantar.
The Korean giant seems to be losing ground to the Chinese brands, especially in the low-end and mid-range segments where it finds it difficult to compete on value for money.
Supply constraints and the rising costs of components also makes it difficult for Samsung to keep handset prices down.
The flagship Galaxy S24 series did however perform well in the high-end segment, but it couldn’t stop an overall market share decline from 20% to 18.9%, according to IDC.
Apple looking strong
Apple retained its spot as the second largest smartphone vendor, but also saw flat growth in its shipments, according to IDC, and a marginal decline in its sales volumes, according to Kantar.
iPhone 15 remained the top-selling smartphone in most of the major markets, except France, where the R3,000 Samsung Galaxy A15 was number one.
Apple also improved its performance in China, where it offered attractive discounts during the 618 online shopping festival – equivalent to Cyber Monday, but in celebration of ecommerce platform JD.com’s anniversary.
However, iPhone upgrades in its home US market are not as frequent, and China is showing an appetite for local produce, which has resulted in Huawei's rise.
But crucially we’re only a couple weeks out from new iPhones with Apple Intelligence.
The global smartphone market is expected to continue its recovery and growth in the coming quarters, driven by the increasing demand for 5G, foldable, and AI-enabled devices, as well as the improving consumer sentiment and macroeconomic factors.
The power of AI
The competition among the leading OEMs is also expected to intensify, as they seek to differentiate themselves with innovative features and strategies.
This will be harder for Android device makers where there is less room to move on a common platform.
According to Kantar, AI has an increasing influence on consumers' purchase decisions, with 11% of Google Pixel buyers and 6% of the average buyers saying that AI was a key reason for choosing their phone.
IDC says generative AI smartphones are expected to grow faster than any mobile innovation and capture 19% of the market with 234 million shipments this year.
