This bit of news will interest people who have participated in intense debates about Xiaomi‘s profitability despite their swift rise to dominance in the last few years. The third largest smartphone maker reported a profit of only $56 million profit in the year of our Lord 2013. For a company valued at more than $10 billion, that is an extremely thin margin. This was reported by Reuters.
Here is a comparison of profit margins by Reuters:
Samsung’s mobile division reported an operating margin of 18.7 percent last year, whereas Apple reported 28.7 percent for the business year ended September 2013. LG Electronics Inc’s (066570.KS) mobile business posted a margin of just 0.5 percent.
Reuters says Xiaomi’s $56 million profit for the specified year is a mere 1.8% margin. Not so flattering. Is Xiaomi’s current game plan sustainable? Shall we be seeing a change in strategy by the Chinese firm soon?