Xiaomi, a global technology leader, is reportedly undergoing a strategic shift in its TV business, gradually phasing out certain low-cost TV models in the Chinese market to concentrate on building a more integrated business ecosystem.
According to CNMO, this move is part of Xiaomi’s broader strategy to move beyond hardware sales and tap into recurring revenue opportunities through internet services.
Xiaomi Prioritizes Ecosystem Over Hardware Profits
While Xiaomi has experienced substantial growth in its smartphone and AIoT (Artificial Intelligence of Things) segments, the low-profit margins from budget TVs have limited its ability to generate significant backend revenue.
The company reported a strong second quarter of 2024, with revenue and profit reaching new highs. Innovative businesses, such as smart electric vehicles, contributed significantly to this growth, accounting for 7.2% of total revenue.
Xiaomi’s AIoT platform, which links various smart devices, has also expanded impressively, with a 25.6% year-over-year increase in connected devices and a surge in monthly active users on the Mi Home app.
As part of its strategic transformation, Xiaomi is prioritizing three key growth areas: smartphones and wearables, home appliances, and smart mobility devices. By focusing on these segments, the company aims to create a more interconnected and value-driven ecosystem for its users.
While discontinuing low-cost TV models might impact Xiaomi’s market share in the short term, it aligns with the company’s long-term vision of becoming a leading player in the technology industry. By shifting focus to higher-margin products and services, Xiaomi aims to enhance its profitability and strengthen its competitive position.
(Via)
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