BEIJING, November 23  (TMTPOST)— China’s leading smartphone maker Xiaomi Corporation saw nearly double-digit decline in revenue as mobile sales weakened in the past quarter.

Source: Visual China

During the quarter ended September 30, Xiaomi registered revenue of RMB70.5 billion (US$9.9 billion) with a year-over-year (YoY) decrease of 9.7%, slightly above analysts’ estimated RMB70.16 billion, while revenue from its core business smartphone fell 11% YoY to RMB42.51 billion, missing the market projection of RMB42.79 billion. Sales of Internet of Things (IoT) and lifestyle products down 9% to RMB19.1 billion, less than the analysts’ expected RMB19.26 billion, and sales from internet services declined 3.7% to RMB7.07 billion, beating the forecasted RMB5.94 billion.

On the bottom line, Xiaomi surprisingly recorded net loss of RMB14.8 billion that quarter, compared with net income of RMB792.3 million a year earlier. The loss was mainly due to changes in the fair value of the company's investment portfolio, the company explained. The adjusted quarterly net income excluding investment gains or losses was RMB2.12 billion with a 59.1% YoY decline, better than analyst’s projected RMB1.99 billion.

Despite the continued global macroeconomic turbulence on global smartphone market demand, Xiaomi said shipments in the third quarter delivered a quarterly-over-quarter increase of 2.8%, though the delivery of 40.2 million units represented an 8.4% YoY decline. Xiaomi maintained its No. 3 global smartphone shipment ranking with 13.6% market share, according to Canalys.

In an earnings conference call on Wednesday, Xiaomi admitted the Covid-19 pandemic still weighed on its mobile production but noted such headwind, generally speaking, is under the control. It stressed the end of pandemic will have very positive impact on sales of the premium smartphone and the large household appliance.

As to inventory clearance, Xiaomi noted the third quarter witnessed its overall inventory shed almost 9% from the previous quarter with inventory in China back to healthy level, and the overseas inventory is expected to return healthy no later than the first quarter next year. In light of current macroeconomic setting, Xiaomi continued relatively conservative outlook on the smartphone market size next year.

Answering questions about the auto unit to produce electric vehicles, Xiaomi reconfirmed a schedule of mass production in 2024, and said it’s well on the track to achieve the goal. Members of auto R&D team have been topped 1,800 people and the efficiency and scale of investments in automaking will not pose meaningful impact on the company, Xiao noted.