On October 16th, Lei Jun’s comment “Don’t rush, this product is very strong” topped the Weibo trending list.
On the morning of October 16th, Qualcomm officially announced that the 2023 Snapdragon Summit will be held from October 25th to 26th. Following past patterns, the Xiaomi 14 is likely to begin its pre-launch ahead of Qualcomm’s event, which led to the above response. “Mi fans” continuously urged Lei Jun for updates, especially since, in addition to the Xiaomi 14 series, the upcoming self-developed operating system, Xiaomi HyperOS, has also garnered much attention.
On the morning of October 17th, Xiaomi’s Chairman and CEO Lei Jun announced on his personal Weibo that the new operating system, “Xiaomi HyperOS”, has been finalized. The Xiaomi 14 series, the first phone with this new system, has been delivered to the factory for production. From now on, Xiaomi HyperOS will gradually replace MIUI.
“For Xiaomi, this is an epoch-making milestone, a key leap towards a ‘human-car-home ecosystem’,” Lei Jun said.
On October 16th, Wang Hua, the General Manager of Xiaomi Group’s PR Department, responded to rumors about the new system’s name, stating that names like MIOS, MiOS, CNMIOS, etc., are incorrect. “Everyone knows that the name ‘iOS’ is legally protected, so any name with this suffix isn’t supported by the law and may even face legal risks of infringement.”
It’s worth noting that 13 years ago, on August 16th, 2010, Xiaomi’s first product, MIUI, was officially launched, marking the true debut of Xiaomi’s products.
Lei Jun announced the official launch of Xiaomi HyperOS, potentially in preparation for the vehicle system.
After the announcement, Lei Jun posted on Weibo, “We just announced: Xiaomi will launch a brand-new operating system, Xiaomi HyperOS. For Xiaomi, this is an epoch-making milestone, a key step towards ‘human-car-home ecosystem’. At this moment, I am extremely excited.”
Lei Jun recalled, “13 years ago, on August 16, 2010, Xiaomi’s first product MIUI was born. In 13 years, from a handful of engineers to a software team of several thousand; from the initial ‘100 dream sponsors’ to 1.175 billion global users; from the first version with only 4 basic features to a deeply integrated cross-platform framework; MIUI’s consistent goal has been to offer the easiest and most user-friendly system experience. Now, it’s time for a leap. Xiaomi now offers more than just smartphones but also has a vast smart ecosystem covering over 200 product categories. The ‘human-car-home ecosystem’ is about to complete its loop. In the era of interconnectedness, the complexity of various operating systems, the vast number of them, and the gaps between different systems and protocols may exceed many people’s imaginations.”
Therefore, Xiaomi HyperOS’s product positioning is a “human-car-home ecosystem operating system”. From this perspective, the release of Xiaomi HyperOS is not just an upgrade to the MIUI mobile system but is more importantly in preparation for Xiaomi’s upcoming vehicle system.
According to Lei Jun’s post, preparations for Xiaomi HyperOS can be traced back to 2014. At that time, IoT business was just starting to take shape, and Xiaomi began exploratory development and verification. In 2017, the development of this new system officially began, aiming to support a unified ecosystem of devices and applications with an integrated system framework.
Lei Jun pointed out that Xiaomi HyperOS is based on a “deeply evolved Android combined with the self-developed Vela system, completely rewriting the underlying architecture.” Lei Jun emphasized that “this system is prepared for interconnection of billions of devices and connections in the future. It’s a massive engineering system.” However, there is currently no further information about the Vela system. Lei Jun stated that the first device equipped with Xiaomi HyperOS is the Xiaomi 14, and at the launch of the Xiaomi 14 series, the outside world will see the real degree of self-development of this system and its potential connection with Xiaomi cars.
Xiaomi’s Q2 financial report revealed phone sales data.
On August 29th, Xiaomi Group (HK01810) released its Q2 2023 performance.
The financial report showed that in the second quarter of this year, Xiaomi achieved a revenue of 673.55 billion yuan, a year-on-year decrease of 4%; adjusted net profit was 51.4 billion yuan, a year-on-year increase of 147%.
Data showed that Xiaomi’s ability to “make money” improved, on the one hand, due to an increase in Xiaomi’s overall gross profit margin, reaching 21% this quarter, a historic high. On the other hand, the company continued to reduce costs and improve efficiency, with Q2 sales expenses of 44.8 billion yuan, a year-on-year decrease of 16%, and management expenses of 11.4 billion yuan, a year-on-year decrease of 13.1%.
Mobile business is Xiaomi’s main source of revenue, but this quarter’s mobile business revenue declined significantly, becoming the biggest drag on Xiaomi’s revenue. The financial report showed that Xiaomi’s smartphone business achieved a revenue of 366 billion yuan in this quarter, a year-on-year decrease of 13.4%, accounting for 54.3% of the company’s total revenue. From a “quantity and price” perspective, a brief overview of Xiaomi’s smartphone business development is provided.
The financial report showed that in Q2 2023, Xiaomi’s smartphone shipments were 32.9 million units, a year-on-year decrease of 15.9%. From an industry perspective, global consumer electronics demand remains relatively weak. Market research firm Canalys reported that in Q2 2023, global smartphone shipments decreased by 10% year-on-year to 258 million units. Among them, Xiaomi held a 13% global market share, ranking third.
However, in the domestic market, Xiaomi’s market share has declined. According to Canalys’s Q2 2023 Chinese market mobile share rankings, Xiaomi’s market share in China was 13%, ranking fifth; the top four were vivo, OPPO, Apple, and Honor, respectively.
The financial report showed that the average shipment price of Xiaomi’s smartphones in Q2 2023 was 1112 yuan, a year-on-year increase of 2.8%. In fact, Xiaomi has been pushing for premiumization in recent years. Premiumization is essential for Xiaomi, as only by going “premium” can the company enjoy more brand benefits, thus avoiding vicious internal competition and increasing profitability.
However, it’s worth noting that in the ultra-premium sector, Xiaomi still faces significant challenges.
Take Xiaomi’s ultra-premium folding screen phone as an example: market research firm IDC’s domestic folding screen phone report showed that in the first quarter of this year, Xiaomi’s share of the Chinese folding screen phone market was 4.5%. However, by the second quarter, Xiaomi’s share had fallen to 2%, ranking last among the seven companies.
Therefore, Xiaomi’s smartphone business still faces significant challenges. Externally, global consumer electronics are still sluggish, and the Indian market is lost; internally, Xiaomi’s premiumization has not achieved decisive results, and the ultra-premium market remains extremely challenging.
Xiaomi’s TV business merged into the mobile division.
According to the China Business Journal’s report on October 14th, recently, rumors emerged that Zhang Feng, a partner of Xiaomi Group, Senior Vice President, and President of the Home Appliances Department, will resign after completing the handover in December. Zhang Feng himself later reposted related Weibo posts, confirming his upcoming departure from Xiaomi. Internal emails from Xiaomi stated that Zhang Feng left for personal reasons.
After Zhang Feng’s departure, the TV business he was responsible for under the original Xiaomi Home Appliances Department will be merged into the mobile division. Pan Jun will continue to serve as the general manager of the TV division, reporting to Zeng Xuezhong, president of the mobile division. Meanwhile, Xiaomi established a new Home Appliances Department, which includes air conditioners, refrigerators, washing machines, etc. Dan Lianyu was appointed as the general manager of the Home Appliances Department, reporting to the group president, Lu Weibing.
Analysts pointed out that the departure of corporate executives usually involves personal, organizational, financial, and other factors. Career planning, work philosophy, organizational structure adjustments, stock cash-outs, compensation, personal health, etc., can all be reasons for core executives to part ways with the company.
Regarding the reason for merging the TV division into the mobile division, Zhang Feng said on Weibo in August that a significant reason is that TVs and mobile phones have stronger synergy in terms of interconnection. This integration can provide users with a better experience.
Regarding this adjustment, Xiaomi official said that it will help enhance its competitiveness in the smart home field. Xiaomi also stated in internal emails that with the changing market and the continuous upgrading of consumer demands, it needs to constantly adjust its strategy to adapt to market changes.
Jiang Han, a senior researcher at Pangu Think Tank, said in an interview, “Xiaomi’s integration of the original home appliances department’s TV division into the mobile division is likely to strengthen the development of its mobile business. Both mobile phones and TVs are Xiaomi’s main businesses. Integrating them can better leverage resource advantages and improve production efficiency and product quality.”
On the secondary market, as of press time, Xiaomi Group (HK01810) reported 12.660 Hong Kong dollars, up 0.96%, with the latest market value of 316.9 billion Hong Kong dollars.