Xiaomi became the world’s second largest smartphone vendor behind Samsung, surpassing Apple in Q2 2021, as its shipments jumped 83% year-on-year to hit a 17% global market share during the quarter, per data from Canalys.
Xiaomi’s boost came as Huawei slashed its smartphone business, especially in overseas markets, under pressure from US sanctions. As a result, Xiaomi was able to ship 50% more smartphones in Europe during Q2 2021, attain a 150% YoY increase in sales in Africa, and manage a 300% YoY increase in shipments to Latin America. Proceeds from overseas markets accounted for half of Xiaomi’s total revenue, founder Lei Jun said in an internal letter to staff.
The company’s success is in part due to its products’ affordability, with the price point of Xiaomi handsets typically being 40% lower than Samsung’s and 75% less than Apple’s, according to Ben Stanton, research manager at Canalys. Lei Jun called the achievement a “major milestone in Xiaomi’s development” in his letter and implored employees to persevere and retain this second place ranking.
To solidify its position, Xiaomi spent RMB 10 billion in research and development in 2020, with another RMB 13 billion earmarked for 2021. The company also aims to recruit 5,000 new engineers in 2021, to advance the standard of its internet-of-things devices, AI, fast charging features, and camera quality.