On March 22, Xiaomi Group (hereinafter referred to as Xiaomi) released its financial reports for the full and fourth quarter of 2021. In 2021, Xiaomi's total revenue reached RMB328.3 billion, an increase of 33.5% year-on-year. Adjusted net profit reached RMB22 billion, up 69.5% year-on-year.
2021 is a year of smart phone shipments picking up, smart phone shipments finally stopped the decline from 2016, ushered in a slight increase last year, but also in this year, Xiaomi's global sales in the second quarter surpassed Apple, the global market share reached 17%, in 22 global markets including Europe to get the first position in market share, the first promotion to the world's second mobile phone manufacturer.
Therefore, Lei Jun has the confidence to announce the goal of xiaomi's high-end at the high-end strategy seminar at the beginning of this year - to take the first place in the market share of domestic high-end mobile phones within three years. Since Xiaomi proposed a high-end strategy in 2020, Xiaomi has become more and more clear about its high-end strategic goals, products and experiences should be fully benchmarked against the iPhone, and within three years, it will take the first place in the market share of domestic high-end mobile phones, and high-end has also become the only way for Xiaomi. Nowadays, just through Xiaomi's financial report for the whole year of 2021, you can get a glimpse of the high-end of its smartphones, as well as the achievements of AloT and Internet business.
The smartphone business is making steady progress
Xiaomi's smartphone business is indeed quite improving in 2021, starting with a large increase in smartphone shipments. In addition to Xiaomi's large increase in smartphone shipments in the second quarter of last year, it is also the only mobile phone manufacturer in China to maintain a year-on-year increase in shipments in the fourth quarter, ranking in the top three positions. According to a research report released by Trend Force, the total production of smartphones in the fourth quarter of 2021 reached 356 million units, and Xiaomi is one of the few companies that continue to maintain growth except Samsung and Apple.
From the perspective of the whole year of 2021, although Xiaomi's smartphone shipments slowed down in the third quarter due to the tight supply of upstream core components, the annual growth momentum of the whole year is considerable, according to IDC statistics, Xiaomi's annual shipments of smart phones reached 191 million, an increase of up to 29.3% year-on-year, and the global market share also increased from 11.5% last year to 14.1% this year.
Ordinary models go in volume, high-end models impact profits, and after the global smartphone market grows to a bottleneck, high-end has also become the only way for Xiaomi. In 2021, Xiaomi's global shipments of high-end smartphones priced at RMB3,000 or more in Chinese mainland and 300 euros or more overseas will exceed 24 million units, doubling from the full year of 2020. Among them, the shipment of high-end smartphones priced at 300 euros or more abroad increased by more than 160% year-on-year.
This year, Xiaomi's high-end strategy continues to advance steadily. At the end of last year and the beginning of this year, Xiaomi released a double-size double high-end Xiaomi 12 series of new products and continue the past extreme cost-effective Redmi series of new products, according to statistics, Xiaomi 12 series after the first month of the purchase of users for new users, the financial report said that from the perspective of shipments, Xiaomi 12 series and Redmi e-sports edition, Snapdragon 8 series shipments have exceeded the sum of other brands.
In the fierce domestic smartphone market, there are still 70% of shipments from offline channels, and customers are more willing to go to the offline store to experience a selection when buying high-end models with an average price of more than 3,000, and middle-aged people with strong consumption power are more willing to go to offline channels to buy high-end products.
Xiaomi's smartphone business will blossom at home and abroad in 2021, and it has to be said that the laying of Xiaomi's offline channels plays an important role. Xiaomi, which created the "Internet smart machine", compared with other domestic mobile phone manufacturers, has been catching up in the laying of offline channels, a key point of Xiaomi in 2021 is to expand the offline market, last October Lei Jun announced the opening of the 10,000th store of Xiaomi Home on the social media platform, and Lu Weibing, general manager of the Redmi brand, continued to propose to reach a new goal of 30,000 stores in 2-3 years. Today, Xiaomi maintains the growth rate of more than 200 new stores per month, and its urban and township coverage rate has exceeded 97% and 85%, in this earnings call, the spokesperson said that the laying of Xiaomi's offline channels is not an overnight thing, the next stage is to improve the operational efficiency of each store.
Looking at the global market, in 2021, Xiaomi's overseas market revenue was RMB163.6 billion, an increase of 33.7% year-on-year, accounting for 49.8% of total revenue. In addition to the smart phone business, overseas Internet and overseas IoT business also showed a strong growth trend, in 2021, overseas Internet revenue of RMB5 billion, an increase of 84.3% year-on-year, and the overseas Internet business of The United States increased strongly year-on-year, accounting for a continuous expansion of total Internet revenue.
Xiaomi as early as 2014 opened the smartphone globalization business, the Indian market as the first stop of Xiaomi's globalization strategy, Xiaomi only took more than three years to seize the first share of the Indian smartphone market, and now Xiaomi has maintained the first position in the Indian smartphone market share for 17 consecutive quarters.
With the successful experience of the Indian market, Xiaomi has increased its growth rate in the development of emerging markets, attaching importance to the cultivation of overseas operator channels, of which Latin American and European operator channel shipments have grown significantly, Xiaomi's overseas high-end mobile phone market has maintained rapid growth, according to Canalys data, according to smartphone shipments, in 2021, Xiaomi ranks first in 14 markets in the world, ranks in the top five in 62 markets in the world, and ranks second in the European market.
In 2021, Xiaomi's R&D expenditure reached RMB13.2 billion, an increase of 42.3% year-on-year, and the compound growth rate since 2017 has reached 43%, and the financial report said that the sharp increase in R&D expenditure was mainly due to the increase in the remuneration of R&D personnel. Under the trend of the huge increase in global shipments of Xiaomi smartphones last year, Lei Jun said at the year-end press conference that "it is decided to officially benchmark Apple in terms of products and experiences, learn from Apple, and surpass Apple step by step in the next period of time." "How to benchmark Apple? Within 5 years, another 100 billion yuan into research and development is one of lei jun's confidence, after the xiaomi high-end goal is clear, technology research and development has become the cornerstone of millet high-end, the launch of the surging C1, surging P1 self-developed chip is the embodiment of xiaomi catching up in self-developed technology.
Zeng Xuezhong, president of Xiaomi's mobile phone department, once said that the construction of talent team is an important part of Xiaomi's 100 billion yuan technology research and development investment, and Xiaomi will not only recruit more engineers, but also increase the training of talents. Xiaomi has launched the Young Engineer Incentive Program and the Middle and Senior Managers and New Decade Entrepreneur Program, and has also distributed the Million Dollar Award for three consecutive years, and at the beginning of this year, Lei Jun awarded the "Million Dollar Technology Award" to the bionic robot team CyberDog (Iron Egg), and the reward team developed and mass-produced a four-legged robot in only 10 months.
AloT's business ecosystem continues to improve
If Xiaomi's smartphone business is the core "1", then the AIoT Internet of Things platform is its sprawl out of countless branches of the "X", Xiaomi has begun to lay out the Internet of Things business since 2013, and its hardware ecology has gradually radiated from the core smart phone to related peripheral products, such as the fiercely competitive TWS headset category in the past two years, and then to various types of smart hardware and even daily life products.
Today, Xiaomi has become the world's largest consumer AIoT IoT platform company. According to the financial report, as of December 31, 2021, the number of Xiaomi AIoT connected devices (excluding smartphones, tablets and laptops) has reached 434 million, an increase of 33.6% year-on-year; the number of users with five or more connected devices to the Xiaomi AIoT platform (excluding smartphones, tablets and laptops) has reached 8.8 million, an increase of 40.4% year-on-year. In December 2021, The monthly active users of XiaoAi Classmate increased by 23.3% year-on-year to 107 million, and the monthly active users of Mijia App increased by 42.0% year-on-year to 63.9 million.
According to IoT Analytics' forecast, the global AIoT industry market is still in a rapid development stage in the future, and from 2020 to 2023, the average annual compound growth rate of the industry is expected to reach 29%. Under the boom, the fierce competition of domestic mobile phone manufacturers has also spread to the AIoT field, and Xiaomi is in a leading position in the industry due to its first layout. From the perspective of specific product categories, the proportion of Xiaomi's large AloT category has increased, of which the sales volume of large categories such as TVs, air conditioners, refrigerators, and washing machines has grown steadily, and the revenue in 2021 has increased by more than 60% year-on-year.
Xiaomi Smart TVs will ship 12.3 million units worldwide in 2021. According to Aowei cloud network data, Xiaomi TV shipments have been ranked first in China for three consecutive years, the world's top five, at the same time, driven by Xiaomi's high-end strategy, the ASP of smart TVs has also increased significantly, driving smart TV revenue to increase by more than 25% year-on-year, and the sales of Xiaomi air conditioners in 2021 have exceeded 2 million sets, an increase of more than 70% year-on-year.
Xiaomi AIoT product matrix continues to enrich, but also put forward higher requirements for its ecological hardware control system, in the release of Xiaomi 12 series, Xiaomi will continue to improve the MIUI Family operating system for AIoT and intelligent central control device MIUI Home, which means that in the future, Xiaomi's huge ecological hardware will be equipped with the same source of MIUI Family operating system, Xiaomi mobile phones, smart watches, tablets, TVs, Air conditioners and other products can realize the interconnection between devices and equipment.
Internet service business is one of the core of Xiaomi's ecological monetization and profitability, with the continuous growth of the number of MIUI users at home and abroad, Xiaomi's Internet service revenue reached RMB 28.2 billion in 2021, an increase of 18.8% year-on-year. As of December 2021, the global MIUI monthly active users increased by 28.4% year-on-year to 510 million, and the global net new MIUI monthly active users reached 113 million in 2021, and the number of Chinese mainland net new users reached 18.9 million. Based on the continuous growth of the number of MIUI users and the further improvement of the penetration rate of high-end products, Xiaomi's advertising business revenue reached RMB18.1 billion in 2021, a year-on-year growth rate of 42.3%.
On this earnings call, Xiaomi finally has a new news about its mysterious automobile business to the outside world, a reporter asked xiaomi's engineering prototype car in the conference call whether it will be produced in the third quarter of this year, although the spokesperson did not confirm the news, but said that xiaomi car is expected to be officially mass-produced in the first half of 2024, according to the financial report, the scale of the R & D team of xiaomi's automobile business has now exceeded 1,000 people, and xiaomi will continue to expand in core areas such as automatic driving and smart yesterday.
How Xiaomi's smart electric vehicles will be difficult to predict in the future, but at the moment when the global smartphone market is becoming more saturated and AIoT competition is becoming more and more intense, Xiaomi not only stabilized the situation, but also created a 33.5% year-on-year increase in revenue for the whole year of 2021, on March 22, the same day that Xiaomi's 2021 annual results were released, due to full confidence in its own business outlook and prospects, Xiaomi's board of directors officially decided to invest HK$10 billion for the public market to buy back shares.
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