Today, while announcing the third quarter financial results of this year, Xiaomi CEO Lei Jun explained why the company’s smartphones are cost-effective. He says that the company has a gross profit margin of just 8 percent to 9 percent, which makes the company’s devices cost-effective.

He believes that the costing of the smartphones will get more outrageous and the devices will become expensive as the industry is moving towards 5G technology. However, he adds that compared to others, Xiaomi’s price-performance ratio will be better.

Lei Jun said: “I think the gross profit margin of 8% -9% is very low and since our sales model is based on e-commerce sales, the pricing that the end customer ends up paying will buy will be very cheap. The most important thing is that our own gross profit is very Low, and the middle channel is very short, so the final price in the retail market remains very attractive to the buyers.”

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He further reiterated that the company will be continuing with the same sales strategy going forward in the 5G phase as well. This makes sense given that the current model of the company seems to be working fine.

Coming to the financial data for the Q3 2019 shared by the Xiaomi Group, the company’s total revenue for the said quarter stands at RMB 53.7 billion, which represents an year-on-year increase of 5.5 percent — making it the highest quarter since Xiaomi’s establishment.

The company reveals that its adjusted net-profit was RMB 3.5 billion which shows year-on-year increase of 20.3 percent, exceeding the market expectations. The total combined net profit of the company for the first three quarters of this year stands at 9.2 billion yuan, exceeding the total net profit of the last year.

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Research firm IDC has today announced the result of market share in the Chinese market for 5G smartphones in the third quarter of 2019. According to the data revealed, Vivo, Samsung, and Huawei were the top three brands for 5G.

The report also reveals that the top three brands accounted for 92.8 percent of the market share for 5G smartphones in China for Q3 2019. Vivo ranked first in terms of market share, capturing 54.3 percent of the market.

There are two 5G smartphones from Vivo available in the market — iQOO Pro 5G and Vivo NEX 3, costing 3,798 Yuan (~$543) and 5,698 Yuan (~$815.05) respectively. Samsung, on the other hand, comes second with a market share of 29 percent. It is selling two devices in the market — Samsung Galaxy Note10 Plus and Samsung Galaxy A90 5G, costing 7,999 Yuan (~$1,144) and 4,999 Yuan (~$715) respectively.

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IDC analysis adds that the 5G smartphone market in China is currently divided into two parts — “budget flagship” and “premium flagship”. While Vivo covers both these categories with its 5G devices, Huawei and Samsung have presence in the “premium flagship” market.

Apart from these three brands, Xiaomi is mainly present in the mid-to-high-end segment while ZTE and China Mobile have presence in the segment costing 4,000-4,500 Yuan which is around $572-644.

According to the “IDC China Smartphone Market Monthly Tracking Report”, as of September 2019, the total shipment of 5G smartphones is about 485,000 units.

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Data analytics firm Canalys has released data for the smartphone shipments in Mainland China in third quarter of this year, i.e. Q3 2019. As per the report, the total smartphone shipments in the region in Q3 2019 stands at 97.8 million units, which indicates a downfall of around 3 percent year-on-year.

The report is ranking Huawei as the leading company in the market with a shipments of 41.5 million units, indicating year-on-year increased of 66 percent. This is remarkable given that the company has posted double-digit growth for the sixth consecutive quarter.

With this, the market share of Huawei in Mainland China has also reached 42.4 percent. Following Huawei in terms of market share is Vivo with shipments of 17.5 million units and 17.9 percent market share.

OPPO, Xiaomi, and Apple are ranked third, fourth, and fifth respectively. Those three brands have shipped 17 million, 8.8 million, and 5.1 million units in that order, for a market share of 17.4 percent, 9 percent, and 5.2 percent respectively.

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Despite facing issues related to the ban on Huawei from the United States, the company recently announced a record-high 200 million smartphone shipments so far this year. The company revealed that this feat was achieved 64 days earlier than the period it took to hit the same milestone last year.

In 2017, Huawei was celebrating 100 million smartphone shipments by the end of September. It achieved the same feat in October 2016. But last year and this year, the company has consistently doubled its shipments despite several distractions and push by key rivals like Samsung.

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South Korean giant Samsung Electronics’ operating revenue has tumbled by 56 percent in the third quarter of this year. The main reason behind the drop is the memory chip business of the company which is currently suffering from low demand.

However, on the positive note, the demand for memory chips has shown sign of improvements in the current quarter. We’ll get the clear picture when the company publishes the report after the end of the fourth quarter.

The company has reported that its operating profit has reached 7.7 trillion won (approximately $6.4 billion) in the July-to-September period, down 56.2 percent from a year ago in its preliminary earnings guidance. Its revenue dropped 5.3 percent to 62 trillion won during the same period. However, the full numbers will be released later this month.

Samsung’s quarter-on-quarter operating profit rose by 16.7 percent while the company’s revenue increased by 10.5 percent, thanks to the rising demand for Samsung’s smartphones in the global market. This is mainly being attributed to the ban on Chinese giant Huawei in the United States.

As per the analysts, the earnings of the South Korean giant will improve in the fourth quarter as well as the next year, mainly because of the recovery in DRAM and NAND memory chips. Shares of Samsung Electronics were trading at 48,400 won during morning trading, up by 1.36 percent, mainly because of better-than-expected earnings.

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While the company has witnessed low demand for the memory chip business, its smartphone business may offset the losses, thanks to the strong demand of the Galaxy Note 10 lineup as well as the revamped low-range and mid-range smartphones with the new Galaxy A-series and Galaxy M-series.

Since Huawei has been put on “Entity List” by the United States, effectively banning the company, Samsung, which is the leading smartphone brand globally, has been widening the gap with Huawei Technologies, the second leading smartphone brand, especially in the emerging markets.

Coming to the mobile shipments, Samsung’s smartphone shipments in the central and eastern Europe soared 21 percent in the second quarter compared to a year ago, solidifying its leadership in the region, reports Counterpoint Technology Market Research.

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