Apple sales dip in China filled by local rival Xiaomi
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Apple’s sales dip in China is providing an opportunity for yet another local Android smartphone maker to win favour with customers and investors.
Xiaomi has gained about $20bn (€18.7bn) in market value since a June low on excitement over its latest handset as well as forays into electric vehicles and other businesses. The Hong Kong-listed stock rose over 60% in that span, making it the best performer on the Hang Seng Tech Index.
Chinese Android makers are capitalising as Apple posts sliding revenue in the country, even amid signs that Asia’s largest smartphone market is starting to bottom out after years of decline.
Xiaomi’s 14 series has received over 1m orders since its launch in late October. That marks the second smash debut for a Chinese smartphone in just the past few months, following Huawei Technologies' success with the Mate 60 Pro. Huawei is unlisted, but investors have been snapping up shares of its suppliers.
While Xiaomi’s stock has surged on the stellar 14 series orders, some analysts say it is poised to climb even higher. Electric vehicles and the so-called 'artificial intelligence of things' (AIoT) are seen as potential additional catalysts.
“We believe there is a trading opportunity in the next six months with smartphone and AIoT growth turnarounds and early expectations building for Xiaomi’s electric vehicle foray,” said Gokul Hariharan, an analyst at JPMorgan Chase, upgrading the shares to overweight.
Other Wall Street firms including Morgan Stanley and Citigroup have cited signs of an end to China’s smartphone downturn and a likely recovery into next year. Huawei’s surprisingly strong comeback has helped to trigger Chinese consumer appetite for innovative local products.
“Huawei is clearly gaining ground rapidly following the new product launch featuring its unique camera function and satellite calling,” said Jian Shi Cortesi, a fund manager at GAM Investment Management.
Xiaomi’s 14 series also sports an advanced camera, as well as the latest Qualcomm processor and an innovative operating system called HyperOS designed to connect the smartphone to cars, appliances, and other AIoT devices.
While Huawei is likely to gain the most share among Chinese brands in the current smartphone cycle, Xiaomi’s technology should help it to fend off rivals including Oppo and Vivo into next year, said Bloomberg Intelligence analyst Steven Tseng.
“In addition, the potential growth opportunity in overseas markets will be in favour of Xiaomi, which has the best overseas presence among all Chinese phone vendors,” he said.
- Bloomberg