China Net Technology March 24 (reporter, Shan Zhengyu) March 24, 2023, Xiaomi Group released the 2022 annual results announcement, 2022 to achieve total revenue of RMB 280 billion yuan, adjusted net profit of RMB 8.50 billion yuan, intelligent electric vehicles and other innovative business expenses of RMB 3.10 billion yuan, the annual R & D expenditure reached RMB 16 billion yuan, 5-year R & D compound growth rate of 38.4%. R & D personnel accounted for nearly 50% of the total number of employees.
In the face of fluctuations in the global macro environment in 2022, Xiaomi has withstood multiple external tests by leveraging its strong strategic execution and continuous optimization of operational efficiency to achieve stable development of various businesses. At the same time, it actively invests in technological innovation and uses technology to lead future development.
In the context of the global mobile phone market demand being suppressed by external factors, Xiaomi’s global smartphone shipments remained third in 2022, reaching 150 million units, and the smartphone ASP achieved three consecutive years of growth. Based on the huge and stable global market size, Xiaomi has made new upgrades in product concept and user experience, and the high-end smartphone business has achieved breakthrough development, with remarkable results. In 2022, Xiaomi and Leica cooperated to launch a number of high-end models, harvesting double growth in sales reputation. Among them, the Xiaomi 13 series received a warm response once it was released, driving Xiaomi to rank first in the Android camp in the price range of RMB 4000-6000 yuan in the Chinese mainland for 7 consecutive weeks. As of January 12, 2023, the series was well received by JD.com over 99%.
With the continuous improvement of high-end competitiveness, Xiaomi’s global smartphone monthly active users once again ushered in a record high. As of December 2022, the number of global MIUI MAU users increased by 14.4% year-on-year to 582 million, continuing to grow.
As a pioneer in the smart era, Xiaomi closely builds smart scenarios around users, forming the world’s leading consumer-grade IoT platform, and creates a colorful life with digital technology. As of December 31, 2022, the number of connected devices (excluding smartphones, tablets and laptops) on Xiaomi’s AIoT platform reached 589 million, a record high.
Benefiting from the advantages of business ecology and precise digital operation management, Xiaomi’s Internet revenue maintained a healthy growth momentum. In 2022, Xiaomi’s Internet service revenue reached RMB 28.30 billion yuan. Among them, the overseas Internet business revenue reached RMB 6.80 billion yuan, a strong increase of 35.2% year-on-year, and Q4 revenue reached RMB 1.90 billion yuan, a new high. Advertising and game business also broke through the market decline and rose steadily. Revenue in 2022 reached 18.50 billion yuan and 4.10 billion yuan respectively.
Technological innovation is the foundation of Xiaomi’s survival and development. Xiaomi has firmly invested in technology, and its R & D expenditure has increased for four consecutive years. It actively deploys smartphones, smart cars, robots and other fields. It is expected that the total R & D investment will exceed RMB 100 billion yuan in five years (2022-2026). Talents are the foundation of technological innovation. Xiaomi actively embraces talents and establishes a sound talent incentive mechanism to encourage innovation and exploration. By the end of 2022, Xiaomi’s R & D personnel accounted for nearly half, and it has held a million-dollar technology award for four consecutive years.
High-end upgrades stimulate growth vitality, with global smartphone ASP growing for three consecutive years
Since 2022, the global economic downturn has been greater than expected, continuing to weaken market consumption power. According to the IMF, global economic growth will slow down from 6.2% in 2021 to 3.4% in 2022. The global smartphone market also continued to decline. According to Canalys data, global smartphone shipments fell by 11.7% year-on-year in 2022, the lowest in nine years.
Xiaomi relies on the advantages of localized operation in the global market and a good marketing structure system to get rid of the risks caused by the fluctuations of the single market and ensure the long-term high competitiveness of the business. According to Canalys data, in 2022, Xiaomi ranked among the top three in 54 countries and regions in the world in terms of smartphone shipments, and ranked among the top five in 69 countries and regions in the world. The annual smartphone business revenue was RMB 167.20 billion yuan.
In 2022, Xiaomi achieved a milestone in the development of high-end smartphones. In July 2022, Xiaomi launched the first Xiaomi 12S Ultra equipped with two self-developed chips, the Surging G1 and the Surging P1, to achieve the perfect combination of one-inch outsole and Leica image aesthetics, providing countless image enthusiasts with a new mobile image experience. In August 2022, Xiaomi launched a new generation of folding screen flagship Xiaomi MIX Fold 2, redefining the ultimate lightness and thinness experience of folding screens, achieving a number of technological breakthroughs, leading the new technical direction and product experience of folding screen mobile phones. The two high-end models firmly implement the high-end price stabilization strategy during the life cycle, ensuring the high-end user experience while also ensuring the gross margin level of high-end mobile phones, laying a solid foundation for Xiaomi’s high-end advanced.
As the answer to three years of high-end exploration, Xiaomi partnered with Leica to create the Xiaomi 13 series, upgrading the high-end imaging experience, with the new MIUI14 system, the smooth experience improved by 60%. Xiaomi 13 series once released for 7 consecutive weeks topped the chart Chinese mainland market Android camp smartphone shipments RMB 4000-6000 price segment first. In March 2023, the international version of Xiaomi 13 series was released, attracting attention from overseas markets.
According to third-party data, in Q4 2022, Xiaomi smartphone sales in the Chinese mainland market ranked first in the price range of RMB 3,000-4,000 yuan and second in the price range of RMB 4,000-5,000 yuan.
The continuous consolidation of high-end has driven Xiaomi’s smartphone ASP to break through new highs. In 2022, the smartphone ASP reached 1111 yuan, of which Q4 Xiaomi’s smartphone ASP in Chinese mainland areas increased by more than 14% year-on-year.
With the continuous recovery of the economy, Xiaomi’s offline retail business has gradually picked up. Through the flexible adjustment of retail strategies, Xiaomi Home has achieved a deeper level of user experience for high-end products and stimulated Xiaomi’s growth vitality. As of February 28, 2023, offline channels have contributed 55% of the sales volume of Xiaomi 13 series, and the channel operation efficiency has been significantly improved.
While the Xiaomi brand is attacking the high-end, the Redmi brand continues to consolidate the mass market and drive the overall healthy development of Xiaomi’s smartphone business. In 2022, the brand’s first wireless charging model, the Redmi K60 series, was launched, all equipped with Qualcomm’s flagship processor, and the first sales volume exceeded 300,000 units in 5 minutes. According to Canalys data, the Redmi Note 11 also became the only domestic mobile phone to be ranked in the top 10 global smartphone shipments in 2022.
Leading industry changes with technological power and driving the imagination of AIoT intelligent scenarios
The financial report shows that in 2022, Xiaomi’s IoT and consumer products revenue reached RMB 79.80 billion yuan, of which Q4 revenue was RMB 21.40 billion yuan, achieving a 12.5% month-on-month growth. As of December 31, 2022, the number of connected devices (excluding smartphones, tablets and laptops) on Xiaomi’s AIoT platform increased by 35.8% year-on-year to 589 million; the number of users with 5 or more devices (excluding smartphones, tablets and laptops) connected to the AIoT platform increased by 32.5% year-on-year to 11.60 million. In December 2022, the number of users of Xiao Ai and Mijia APP MAU achieved a year-on-year growth of 7.1% and 18.6% respectively, reaching 115 million and 75.80 million.
Based on the persistence of continuously creating value for users and promoting the multi-integration of scenarios in the intelligent era, Xiaomi accelerated the expansion of intelligent space. In 2022, Xiaomi’s global shipments of smart TVs reached 12.40 million units, and the annual revenue of smart home appliances increased by more than 40% year-on-year. Among them, the shipment of air conditioners increased by more than 50% year-on-year, the shipment of refrigerators increased by nearly 100% year-on-year, and the shipment of washing machines increased by more than 39% in Q4 2022.
In the fields of office and home entertainment, Xiaomi tablet shipments increased by more than 160% year-on-year, and Q4 Chinese mainland shipments hit a new high in a single quarter. According to Canalys data, Xiaomi tablet’s market share in the Chinese mainland in 2022 rose to third, and the leading advantage continued to be released.
In addition to providing users with high-quality products, Xiaomi also attaches great importance to technological innovation and the transformation of achievements, and uses imagination to open up industry boundaries. In February 2023, Xiaomi launched Xiaomi Book 12.4 2-in-1, which won the 2022 Red Dot Product Design Award for its comprehensive functions, simple appearance and stylus configuration. Mijia Air Conditioning also won 9 industry technology awards, 3 German Red Dot Design Awards and 1 American IDEA Design Award in 2022.
Xiaomi launched a new upgrade to the MIUI14 system, AIoT product discovery speed increased by 50%, transmission speed increased by 77%, and interconnection experience was optimized and upgraded. At the same time, Xiaomi released the Xiaomi Watch S2 smartwatch and Xiaomi Buds 4 semi-in-ear noise reduction earphones to further strengthen the coordination and integration between categories. According to Canalys data, in 2022, Xiaomi ranked second in the shipment ranking of wearable wristband devices and TWS earphones in the Chinese mainland.
The collaboration between channel layout and product structure has been further deepened, and the GMV of Xiaomi’s offline channel AIoT products will increase by more than 27% year-on-year in 2022, maintaining a good growth trend.
The efficiency of commercialization has been continuously improved, and overseas Internet revenue has reached a new high
In 2022, Xiaomi’s Internet business continued to perform well in the market, with annual revenue reaching RMB 28.30 billion yuan. At the same time, the number of MIUI MAU users in the global and Chinese mainland markets achieved breakthrough growth. In December 2022, the number of global MIUI MAU users increased by 14.4% year-on-year, reaching 582 million, and the number of Chinese mainland MIUI MAU users increased by 10.7% year-on-year, reaching 144 million. The number of new users also continued to expand in 2022. The net new MIUI MAU users in the global and Chinese mainland regions were 73.30 million and 13.80 million respectively.
Through building a high-quality internet service ecosystem with global partners, Xiaomi’s overseas internet business maintained rapid growth, with annual revenue reaching RMB 6.80 billion, an increase of 35.2% year-on-year. Among them, Q4 Xiaomi’s overseas internet service revenue increased by 19.4% year-on-year, reaching RMB 1.90 billion, setting a new record high, and accounting for 26.1% of the overall internet service revenue.
In the face of the overall downturn in the industry, Xiaomi’s global advertising and game revenue still achieved sustained and healthy development. Among them, the annual revenue of the advertising business reached 18.50 billion yuan, and the revenue of the Q4 advertising business was 4.70 billion yuan. Under the dual blessing of high-end strategy and efficient operation, the game business also rose against the trend, achieving 4.10 billion yuan, an increase of 4.4% year-on-year. Q4 Xiaomi’s game business revenue reached 1 billion yuan, and has been increasing year-on-year for 6 consecutive quarters.
Xiaomi always takes user request as the core and provides users with diverse products and services. In 2022, Xiaomi’s TV value-added service revenue in Chinese mainland will increase by more than 25% year-on-year. Under the continuous optimization of operation management, in December 2022, the number of monthly active users of smart TVs worldwide exceeded 58 million, and the scale of TV Internet paid users increased to 6 million.
Increase investment in technological innovation, improve quality and efficiency, and focus on long-term development
As the key to Xiaomi’s development, technological innovation has always been the focus of Xiaomi. In 2022, Xiaomi will continue to invest in technological research and development, with R & D expenditure of RMB 16 billion yuan, a five-year compound growth rate of 38.4%, and it is expected that the total R & D in five years (2022-2026) will exceed RMB 100 billion yuan. As of December 2022, the proportion of R & D personnel in the total number of employees has increased to nearly 50%.
Benefiting from this, Xiaomi has made fruitful achievements in innovative technologies and demonstrated its technological hard power. In 2022, in the field of bionic robots, Xiaomi’s first full-scale humanoid bionic robot, CyberOne, was officially unveiled; in the field of battery technology, Xiaomi released a new self-developed surging G1 chip, and at the same time announced pre-research solid-state battery technology to improve charging experience and enhance battery performance; in the field of imaging, Xiaomi joined hands with Leica to conduct in-depth joint research and development, and launched an imaging strategy upgrade; in the new display field, Xiaomi launched a wireless AR glasses exploration version, self-developed micro-gesture interaction, smooth experience and smooth application.
In terms of smart electric vehicles, Xiaomi will give full play to its innovation advantages and open up new growth space. In 2022, the investment in innovative business such as smart electric vehicles will be RMB 3.10 billion yuan, and the size of the automotive business team will be about 2,300 people. Xiaomi Automobile will continue to maintain the mass production target in the first half of 2024.
Xiaomi’s technological strength has also been recognized by the international market. In October 2022, Xiaomi was selected as one of the "Top 50 Most Innovative Companies in the World 2022" selected by The Boston Consulting Group (BCG), which once again confirmed Xiaomi’s practical practice of technology.
In 2023, the policy of stabilizing the economy will be gradually implemented, the market economy will recover in an all-round way, and the repair of consumption scenarios will be accelerated. Aiming at higher-level development, Xiaomi launched a new business strategy of "emphasizing both scale and profit". At the same time, it established a group operation management committee and a group human resources committee to coordinate and optimize in terms of strategic structure, operation management, resource allocation, etc., focusing on improving quality and efficiency, and promoting the construction of a professional long-term operation and governance system. The headwinds brought by the future macro environment will gradually ease, and consumer demand and the vitality of scientific and technological innovation will continue to be released. With Xiaomi’s promotion of innovative business landing, continuous scientific and technological research and improvement of business governance model, the company is expected to accelerate
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