Xiaomi Earns RMB 200 Profit per Smartphone

Beijing Times, 6/27/12

Lei Jun, chairman and CEO of Beijing-based Android handset developer Xiaomi, announced yesterday that after losing money on its first 300,000 Xiaomi smartphones, Xiaomi has begun to realize a "micro-profit" of around 10% per handset. Based on the Xiaomi phones' standard retail price of RMB 1,999, this would mean a profit of around RMB 200 per handset sold. Lei said that Xiaomi has no plans to IPO within the next five years, adding that Xiaomi would not necessarily IPO afterwards either.

Zhou Hongyi, chairman of Chinese online security software developer Qihoo 360 (NYSE: QIHU), responded to the handset cost breakdown provided by Lei Jun by saying that the gross profit per handset should be more than RMB 800 according to Lei's calculations, with after-tax profits of RMB 600.

Editor's Note: For more background on this topic, please see "Xiaomi Wins USD 216 Mln in Third-Round Funding" MD 6/26/12 issue.

Keywords: Lei Jun Zhou Hongyi handset smartphone IPO profit wireless Xiaomi

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