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Third place phonemaker continues to grow rapidly in shipments, revenue, and profits

Xiaomi, Inc. -- a Chinese gadget maker who's rocketed to third place in global sales and first place in sales in its home country -- reported some results of its record-setting 2014 year of sales, hot on the heels of its recent $45B USD valuation.

The OEM, who just raised $1.1B USD in the venture capital round that gave it the fresh valuation, seems destined for an initial public offering (IPO) in the near future.  An IPO would make CEO and cofounder Lei Jun -- who owns 77.8 percent of the company according to a regulatory filing -- one of China's richest men.  Lei Jun founded the company in 2010 after serving for years as a top executive in China's software market.

The CEO announced via his official Webio microblog account that Xiaomi had sold a little over 61.12 million smartphones in 2015 -- up 227 percent over 2013's sales volume.  He did not share tablet sales figures, but Xiaomi is also is estimated to have sold several million tablets.

Xiaomi
Xiaomi saw sales grow to 61.12 million smartphones sold in 2014, a 227 percent increase, according to Mr. Lei's microblog post. [Image Source: Weibo/Lei Jun]

In a followup post, Mr. Lei announced that Xiaomi's pre-tax revenue had risen 135 percent on a year-to-year basis to reach CN¥74.3B ($11.97B USD) in 2014.  While Xiaomi is making money hand-over-fist when it comes to revenue, one problem spot is profit.  While profits are also reportedly rising fast, they're far smaller than the gawdy numbers enjoyed by South Korea's Samsung Electronics Comp., Ltd. (KRX:005930) (KRX:005935and Apple, Inc. (AAPL).

Mr. Lei did not report any numbers on Xiaomi's profitability.

Lei Jun announcing Mi 4
Xiaomi CEO Lei Jun is seen at last year's Mi 4 launch. [Image Source: Reuters]

Reuters reports that one of Xiaomi's divisions (likely the budget phone unit) made CN¥26.6B ($4.29B USD) -- roughly a third of the company's total revenue -- but only saw a profit of CN¥347.5M (~$56M USD).  That's a razor thin margin of 1.8 percent.  Overall it's questionable whether Xiaomi even turned a billion dollars worth of profit on its massive device volume, even as its rivals pocketed tens of billions over the year.

Xiaomi CEO wrote in another post that his company will be announcing details on a new flagship smartphone on Jan. 15 (likely the Mi 5).  He also wrote in the earnings post that Xiaomi plans to target overseas markets this year.  Reuters writes that Xiaomi must do this as its growth in China is slowing, as the world's largest smartphone market approaches saturation.

Sources: Lei Jun on Weibo, Reuters





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